By Sarah Turner
Financial stocks jumped on Thursday, fueling a broad advance in Europe after data revived optimism on the economy and Dutch financial conglomerate ING Group scored a broker upgrade.
The pan-European Dow Jones Stoxx 600 index climbed 0.5% to close at 205.64.
The index lost ground in the four previous trading sessions, a move Tammo Greetfeld, strategist at UniCredit, referred to as a "reality check" while investors assessed prospects for economic growth. UniCredit strategists believe there are good odds for positive surprises. "For that reason, we are sticking to our constructive equity market assessment for the coming months," Mr. Greetfeld said.
Better-than-expected data came from the U.S. on Thursday and included a 1.2% rise in U.S. leading economic indicators in May and improved economic activity in the Philadelphia region.
On a regional level, the U.K. FTSE 100 index advanced 0.1% to close at 4280.86, the German DAX Xetra rose 0.8% to finish at 4837.48 and the French CAC-40 index gained 1% to end at 3194.06.
Stocks were higher in the U.S. while Asia markets ended lower.
Banks are perceived to be some of the stocks most leveraged to any improvement in the economic backdrop and Bank of Ireland shares jumped 7.9% in London, while Credit Suisse /zigman2/quotes/205269278/delayed CH:CSGN +1.00% shares climbed 5.2%.
ING Group /zigman2/quotes/203351007/delayed NL:INGA +0.75% shares jumped 8% after it was upgraded to buy from neutral and added to the Goldman Sachs conviction buy list. "In our view, ING's capital position has stabilized," the broker said. "We are more confident in ING's ability to withstand likely losses. Also, we believe any capital raising activity would be pro-active rather than re-active," the broker added. "Quarter on quarter improvement in the capitalization ratios should substantiate our thesis -- the worst is behind ING," it said.
U.K. lender Lloyds Banking Group /zigman2/quotes/202285510/delayed UK:LLOY +1.45% advanced 3.3% after it was upgraded to "neutral" from "underperform" at Macquarie Group. The broker said that both Lloyds Banking Group and Royal Bank of Scotland face significant challenges as profit erode. "Share dilution has been milder, however, and we consider that the recovery potential of the shares is greater," it noted.
Carnival /zigman2/quotes/210414141/delayed UK:CCL -0.26% shares rose 7.2% in London after it said it earned $264 million, or 33 cents a share, last quarter -- down from $390 million, or 49 cents a share, in the same period a year ago. The figure beat analyst forecasts. Revenue fell to $2.9 billion from $3.4 billion.
Shares of HeidelbergCement /zigman2/quotes/202418791/delayed DE:HEI +0.24% jumped 17% in Frankfurt after it said it has completed its debt refinancing.
Pfleiderer shares dropped 11% after the German flooring firm said that first-quarter sales volumes and prices were below levels seen a year ago and the firm now expects earnings to fall significantly.
Write to Sarah Turner at firstname.lastname@example.org