European stocks eye third week of gains; Valeo rallies

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) — Europe’s benchmark stock index headed for a third-straight week of gains on Friday, with Valeo SA rallying after reporting earnings, and BAE Systems PLC and Rémy Cointreau SA climbing after broker upgrades.

The Stoxx Europe 600 index

/quotes/zigman/2380150/realtime XX:SXXP
+0.20%

added 0.3% to 335.68, setting it on track for a 0.7% weekly advance. If the index scores a third week of gains, it would mark the longest weekly winning streak since November last year.

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Emerging Asian markets hold promise

Opportunities still abound in some Asian emerging markets, including China and India, says Rahul Chadha, co-chief investment officer at Mirae Asset Global Investments in Hong Kong.

The index broke a four-day winning streak on Thursday after disappointing Chinese manufacturing data stirred renewed concerns about slowing growth in emerging markets. In January, China’s manufacturing purchasing managers’ index also missed expectations and partly triggered a global market rout, where emerging-market currencies were hit especially hard.

In Friday’s trade, shares of Valeo

/quotes/zigman/168105/realtime FR:FR
+11.44%

rallied 12% after the French auto-parts maker said profit rose 18% in 2013.

Rémy Cointreau SA

/quotes/zigman/165074/realtime FR:RCO
+0.81%

gained 2.2% after Barclays lifted the spirits maker to overweight from equal weight. The analysts said it is the drinks maker most-geared toward China and will benefit from “low penetration rates and attractive wealth demographics” in the country.

Shares of BAE Systems

/quotes/zigman/213625/realtime UK:BA
+2.36%

/quotes/zigman/259559/delayed/quotes/nls/baesy BAESY
-7.66%

added 2.4% after Société Générale lifted the aerospace and defense firm to buy from hold, according to Dow Jones Newswires. On Thursday, the U.K. company dropped 8.3% after posting a fall in 2013 profit.

Shares of AXA SA

/quotes/zigman/163199/realtime FR:CS
+0.15%

gained 0.8% after the insurer said full-year profit rose, although missing market expectations.

On a relatively quiet data day in Europe, U.K. retail sales were the main focus on the numbers front. The Office for National Statistics said sales fell 1.5% in January from the previous month, but the institution cautioned that the drop came after a solid rise in December sales. Year-on-year, January retail sales picked up 4.3%, and analysts stressed that the underlying strength of the U.K. consumer spending is broadly intact. Another factor to keep in mind is that the January data covered an extremely wet period with serious floods in parts of the country.

Later in the day, existing-home sales data in the U.S. for January are likely to grab attention on their release at 3 p.m. London time. U.S. stock futures pointed to a higher open on Wall Street.

In Europe, the U.K.’s FTSE 100 index

/quotes/zigman/3173262/realtime UK:UKX
+0.09%

gained 0.2% to 6,826.83, France’s CAC 40 index

/quotes/zigman/3173214/realtime FR:PX1
+0.25%

rose 0.4% to 4,370.49, and Germany’s DAX 30 index

/quotes/zigman/2380246/realtime DX:DAX
+0.12%

inched 0.1% higher to 9,631.75.