Stocks soar amid Rehn's comments on debt crisis

Eurostoxx 50: 2,372.15 (+56.18) Frankfurt DAX: 5,994.47 (+129.46) Paris CAC: 3,229.76 (+76.24)EUROPEAN STOCKS climbed to a two-month high yesterday, as the European Commission's Olli Rehn said the debt crisis can be resolved, outweighing earnings from Alcoa that missed estimates.

The Stoxx Europe 600 Index rose 1.7 per cent in London.

“Equity markets are still giving euro zone leaders the benefit of the doubt in their efforts to stem the crisis,” said Nicholas Spiro, managing director of Spiro Sovereign Strategy in London. “A greater sense of urgency should not be mistaken for measures to tackle the sovereign debt crisis head-on.”

Mr Rehn said in a pre-recorded speech to a Dublin conference that the euro area is approaching a consensus on resolving the debt crisis. He said economic growth is stalling and Europe is in “a very dangerous place,” though the region can avert “calamity” by co-ordinating action, increasing banks’ capital and enhancing growth.

Alpha Bank and National Bank of Greece soared 18 per cent to €98 and 15 per cent to €1.84, respectively.

Piraeus Bank rallied 14 per cent to €29. Barclays jumped 6.8 per cent to 187.55p.

Société Générale and BNP Paribas, France’s biggest banks, added 5.8 per cent to €23.03 and 5.6 per cent to €36.30.

European Commission president Jose Barroso called for a reinforcement of crisis-hit banks, the payout of a sixth loan to Greece and a faster start for a permanent rescue fund to master Europe’s debt woes.

ASML rose 6.6 per cent to €28.27 after reporting third-quarter net income of €355 million, topping the average estimate of €323 million in a Bloomberg survey.

Michelin and Cie, the world’s second-largest tyre maker, gained 5.4 per cent to €49.01 as a gauge of auto stocks posted the best performance of the 19 industry groups in the Stoxx 600.

Fiat, Italy’s biggest automaker, jumped 7.8 per cent to €4.92 and Germany’s Daimler surged 5 per cent to €37.64.

Clariant and Yara International led a rally in chemical stocks, climbing 6.7 per cent to 9.79 Swiss francs and 4.6 per cent to 246.40 kroner, respectively.

K+S, Europe’s biggest potash producer, rose 3.7 per cent to €43.80. – (Bloomberg)