EU STOCKS rebound as China allays crunch concern

European stocks climbed from a six-month low as the People’s Bank of China allayed concern over a cash crunch and investors awaited reports that may show U.S. durable-goods orders and sales of new homes increased.

The Stoxx Europe 600 Index increased 1.2% to 278.87.

France’s CAC 40 index rallied 1% to 3,632.71, Germany’s DAX 30 index gained 0.8% to 7,750.82 and the U.K.’s FTSE 100 index rose 0.4% to 6,053.77.

Peugeot rallied 5.1%. Europe’s second-largest carmaker said it has received more than 26,000 orders in Europe for the 2008-model crossover. Peugeot is betting that the new 208 compact city car and the 2008, a derivative of that vehicle, will help it keep market share in Europe.

Fiat SpA rose 4.4% and Renault SA increased 5%.

Vinci rose 3.9%. Berenberg initiated coverage of Europe’s largest builder with a buy rating, saying that the company’s size, balance sheet and technical expertise give it a competitive advantage over its European peers.

ARM added 3.5%. Investec upgraded the company to buy from hold, citing the stock’s recent decline. The shares are still 28% below their high in May.

Icade SA advanced 2.7%. UBS raised its recommendation on the company to buy from neutral.

European lenders rose, after the Stoxx 600 Banks Index yesterday dropped to its lowest level since November, with HSBC adding 1.4% and UBS gaining 2%. Deutsche Bank AG, Germany’s largest bank, gained 2.1%.

Rexam Plc, a maker of beverage cans, dropped 4.1% to the lowest price in a year, after saying that full-year results will be lower than it previously estimated.

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