EUROPE MARKETS: European Stocks Lifted By German Data; BASF Gains

By Barbara Kollmeyer, MarketWatch

MADRID (MarketWatch) -- European stocks shifted higher on Tuesday after slightly better-than-expected German jobless data, while broker moves triggered gains for stocks such as BASF SE and Delta Lloyd NV, and losses for Swedish Match AB and Debenhams PLC.

The Stoxx Europe 600 index rose 0.2% to 327.75, following a drop of 0.2% on Monday.

Vestas Wind Systems AS was the biggest mover on the Stoxx 600, up more than 5%.

Broker moves triggered action for several companies. Shares of BASF SE added nearly 3% after UBS lifted shares to buy from neutral, saying the company should resume a re-rating trend relative to other big-cap chemical household names. UBS also cut Air Liquide SA to sell from neutral, triggering a drop of 1%, saying shares in the industrial gas producer should resume underperformance versus BASF.

The German DAX 30 index rose 0.3% to 9,457.30 after data showed seasonally adjusted jobless figures in the country falling 15,000 to 2.97 million in December, which was better than expected. German retail sales data also came in better than expected, with a November preliminary rise of 1.5%.

Delta Lloyd NV rose 3% after J.P. Morgan Cazenove lifted shares to overweight from neutral, in a broad note on European life insurers. The investment bank said it's positive on the sector as it sees increasing focus on balance-sheet strengthening, cash flows and restructuring. It said shares of Delta Lloyd, specifically, should continue to see a re-rating.

On the downside, shares of Swedish Match AB were a top decliner, off 4.8% after Citi cut it to sell from neutral, saying competition pressures in Sweden were likely to continue in 2014. It cited specific worries about the cigar sector.

A number of tech companies were affected by a note from Barclays analysts on the sector. They said they see a gradual improvement for the European technology sector, but shares of Software AG fell 4% after a cut to equalweight from overweight, while ST Microelectronics NV slid 2.3% after a cut to underweight from equalweight.

Shares of Severn Trent PLC fell 2.3% after J.P. Morgan Cazenove cut shares in the water company to underweight from neutral. It cited concerns about rising regulatory risks, and a decreasing likelihood of mergers and acquisitions activity.

Retailer Debenhams PLC fell 2% after HSBC cut it to neutral from overweight, citing a poor Christmas sales season. However, it lifted fellow retailer Next PLC to overweight from neutral, with those shares up 0.4%. The FTSE 100 index rose 0.3% to 6,747.80.

The French CAC 40 index gained 0.2% to 4,237.78, with banks such as Credit Agricole SA and BNP Paribas SA up 2.4% and 1.%, respectively.

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