European stocks advanced the most since April as Portuguese banks led a rally by euro-zone lenders and a report showed China’s economy expanded at a better-than-expected pace.
Banco Espirito Santo SA jumped the most in two weeks after a Portuguese newspaper said the lender may raise 2 billion euros ($2.7 billion) from new shareholders to strengthen its capital ratios. Rio Tinto Group added 2.8 percent as the mining company said quarterly iron-ore production climbed 11 percent. Gtech SpA gained 3.9 percent after agreeing to buy International Game Technology for $4.7 billion.
The Stoxx Europe 600 Index rose 1.4 percent to 343 at 2:26 p.m. in London. The benchmark dropped the most since March last week after one of Banco Espirito Santo’s group companies failed to pay back some debt, igniting concern about lenders in the euro zone’s most indebted nations.
“The periphery is very strong today,” Herbert Perus, who helps oversee $36 billion as head of equities at Raiffeisen Capital Management in Vienna, said in a phone interview. “The periphery bank stocks that were sold heavily are rebounding today. The China data is a part of the overall good picture and is more for the very short-term investors.”
Banco Espirito Santo jumped 13 percent to 43 euro cents. Diario Economico reported that the bank plans to strengthen its capital ratios. The newspaper didn’t say how it obtained the information. Rioforte Investments SA, which has an indirect stake in the lender, plans to file for protection from creditors, according to a person familiar with the matter. Rioforte owns 49 percent of Espirito Santo Financial Group, which has a 20 percent stake in the lender.
Portugal’s PSI 20 Index climbed 3 percent, leading gains by European equity markets today. Banco Comercial Portugues SA rallied 6.8 percent to 11 euro cents. All 18 western-European markets advanced today. France’s CAC 40 and Germany’s DAX gained 1.5 percent, while the U.K.’s FTSE 100 added 1.2 percent.
Banco Santander SA, Spain’s biggest lender, rose 2.1 percent to 7.45 euros. Banco Bilbao Vizcaya Argentaria SA, the second largest, added 1.9 percent to 9.17 euros, while Banco de Sabadell SA rose 5.3 percent to 2.43 euros.
Portugal Telecom SGPS SA surged 7.7 percent to 1.97 euros. Rioforte yesterday failed to pay some short-term debt to the telecommunications operator.