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Europe: UK banks lead Europe's stock rally
[LONDON] Britain's lenders led the rally in European equities, extending their three-month high.
Royal Bank of Scotland Group Plc and Royal Bank of Scotland Group Plc climbed more than 2 per cent after the Bank of England said all seven major lenders passed stress tests. The FTSE 100 Index was among the best performers in western-European markets.
The Stoxx Europe 600 Index is rising for a second day, up 0.4 per cent at 8.11am in London. The gauge rallied for a second month in November, taking its rebound from a low in September to 14 per cent. Anticipation for further European Central Bank stimulus and confidence that the US economy is strong enough to weather higher borrowing costs helped spur the rally.
The optimism led to fund managers increasing their allocation to global stocks last month. The timing was no coincidence: equities have wrapped up the year with gains on all but five occasions since 1988, with December posting the biggest and most frequent increases of any month, data compiled by Bloomberg show.
Miners advanced with commodities after a private measure of China's manufacturing came in better than forecast, while the official purchasing managers index fell. BHP Billiton Ltd rebounded 1.8 per cent after closing at its lowest price since 2008.
Zurich Insurance Group AG fell 1 per cent after saying its chief executive officer will leave the company at the end of the year. The Swiss Market Index was little changed after report showed that the nation's economy unexpectedly stagnated in the third quarter.
Gases supplier Linde AG slumped 10 per cent after cutting its earnings targets for the third time in just over a year. Safran SA dropped 2 per cent after France lowered its stake in the jet engine maker.