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Capital Markets

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Categorized | Equities

Stronger Carrefour lifts European stocks

Posted on August 29, 2013

Equity markets were broadly higher on a big day for results in Europe, helped by a strong showing for the region’s biggest retailer.

Carrefour, which is the world’s number two retailer after Walmart, reported first-half operating profit up nearly 5 per cent to €766m, broadly in line with expectations, as earnings in its biggest market of France jumped 75.4 per cent.

    “The improvement in France gives much credibility to the bull-case that a great deal of self-help is available to the business and swift recoveries in earnings possible,” said Alastair Johnston at Citigroup.

    Carrefour shares climbed 5.6 per cent to €24.06.

    Zurich Insurance was among the biggest fallers after chief executive Josef Ackermann stepped down following the death of colleague Pierre Wauthier, chief financial officer, this week. Its shares were down 2.5 per cent to SFr228.80.

    The FTSE Eurofirst 300 climbed 0.8 per cent to 1,207.52. In Germany, the number of unemployed rose unexpectedly but, after falling 3.3 per cent in the previous two days, the Xetra Dax pushed 0.5 per cent higher to 8,194.55.

    French media, television and telecoms group Vivendi climbed 1.6 per cent to €15.60 as it added new customers in the second quarter, saw a decreased rate of customers leaving and a slower rate of profit decline than in previous quarters.

    Domestic rival Bouygues, which rose nearly 10 per cent on Wednesday following its first-half results, came back to earth with a 3.8 per cent drop to €24.37.

    Earlier this year, Bouygues entered into talks with Vivendi’s SFR mobile unit about sharing some of their network resources.

    “Bouygues has now outperformed both the European construction and telecoms sector,” said Frederic Boulan at Nomura. “We would be reluctant to chase the shares at these levels considering the recent rally.”

    Shares in beverages producer Pernod Ricard fell 1.9 per cent to €89 after it reported full-year sales growth below market expectations as the slowdown in China took its toll.

    Continental, the German tyre and car parts maker, climbed 3.9 per cent to €116.35 as the motor sector recovered following recent losses.