European stocks rose in Forex Online, snapping the Stoxx Europe 600 Index’s largest two-day drop in five months, as German business confidence climbed to a record high in January and banking shares rallied.
Royal Bank of Scotland Group Plc soared 6.5 percent after a report that the bank has talked to the U.K. government about leaving the program to insure its toxic assets.
ArcelorMittal jumped 2.9 percent as UniCredit SpA upgraded the shares. Finmeccanica SpA surged 4.5 percent as it posted higher-than- forecast free operating cash flow in 2010.
The Stoxx Europe 600 Index gained 0.7 percent to 281.26 at the 4:30 p.m. close in London. Even so, the gauge lost 0.9 percent this past week, its first weekly decline in 2011. The measure has added 2 percent this year as reports suggested the global economy is recovering and investors speculated that Europe’s leaders will increase their efforts to contain the region’s debt crisis.
The Stoxx 600 is trading at about 11 times the estimated profits of its companies, near the cheapest valuation since April 2009, according to data compiled by Bloomberg.
National benchmark indexes climbed in all the 18 western European markets except Denmark and Greece. France’s CAC 40 Index advanced 1.3 percent, the U.K.’s FTSE 100 Index andGermany’s DAX Index both added 0.5 percent.
Spain’s IBEX 35 Index and Italy’s FTSE MIB Index posted the best performances, gaining 1.8 percent and 1.4 percent, respectively.
European stocks extended their gains after companies from General Electric Co. to Schlumberger Ltd. posted fourth-quarter profit that beat analysts’ estimates. After the close of trading yesterday, Google Inc. also announced fourth-quarter net income that exceeded the average analyst prediction.