European stocks climbed to their highest level since May 2008 as Germanys annual inflation rate rose diminishing chances the European Central Bank will loosen monetary policy.
The Stoxx Europe 600 Index gained 0.4% to the highest close since May 2008, and yields on Spanish five-year notes rose to 2.66%. Most Brazilian stocks fell while Canadian shares climbed as gold rose for the first time in three days in London. The Stoxx 600 has gained 0.9% in November, on track for a third monthly gain. The European index has advanced 16% this year, compared with a 27% jump in the Standard & Poor’s 500 Index. UKs FTSE 100 remained almost unchanged rising less than 0.1% while DAX soared 0.4% in yesterday trade.
“The more resilient German inflation is, the higher the hurdle is for more easing from the ECB,” said Eimear Daly, a currency-market analyst at Monex Europe Ltd. in London. “The inflation number from Saxony significantly boosted the euro.”
In Asian markets, Japan’s Nikkei 225 added 1.8%, the most in a week, as Honda Motor Co., which gets more than 80% of its sales outside Japan, advanced 1.5%.
“Asia’s earnings growth does remain largely leveraged to the global economy,” Michael Kurtz, the Hong Kong-based head of global equity strategy at Nomura Holdings Inc., said in an e-mail, cited by Bloomberg. “Our economists expect the U.S. economy finally to accelerate to a more robust pace in 2014.”
In corporate news, Imperial Tobacco Group Plc slumped 1.9% to 2,316 pence and British American Tobacco Plc fell 0.7% to 3,250.5 pence. The U.K. government reversed its position on plain cigarette packs for the second time in four months. U.K. Health Minister Jane Ellison told BBC Radio 4 that the government is considering introducing plain packaging.
Compass Group Plc lost 1.8% to 922 pence after Citigroup Inc. cut its rating on the stock to “neutral” from “buy”. Shares of the world’s biggest catering company have risen 29% in 2013, compared with a gain of 13% for the U.K.’s FTSE 100 Index.