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European Stocks Rise on China Trade Data Report, EU Budget Cuts

Feb. 8 (Bloomberg) -- European stocks advanced for the first time in three days, paring a weekly decline, as trade data from China exceeded estimates and European Union leaders prepared the first-ever cuts to the bloc’s budget. U.S. futures and Asian shares were little changed.

Software AG, Germany’s second-biggest software maker, rose 2.2 percent after saying it will buy back shares. Credit Agricole SA jumped the most in more than two months after Exane BNP Paribas SA raised its recommendation on the stock. Telecom Italia SpA fell to a three-month low after posting full-year earnings below analysts’ projections.

The Stoxx Europe 600 Index climbed 0.7 percent to 285.85 at 12:58 p.m. in London, paring its weekly drop to 0.8 percent. The benchmark gauge has still gained 2.2 percent so far this year as U.S. lawmakers agreed on a budget preventing spending cuts and tax increases that had threatened to push the world’s biggest economy into recession. Standard & Poor’s 500 Index futures were little changed today, and the MSCI Asia Pacific Index added 0.1 percent.

“The improvement in China’s data is a positive for European equities,” Richard Scrope, who helps manage 100 million pounds ($159 million) as fund manager at Oriel Asset Management LLP in London, said in a phone interview. “The European Union’s decision to cut the budget is a prudent one. A prioritization of where money should be spent is better than simply increasing spending on everything.”

The volume of shares changing hands in companies listed on the Stoxx 600 was 0.9 percent lower than the average over the past 30 days, according to data compiled by Bloomberg.

China Trade

China’s exports and imports rose more than estimated in a January that had five working days more than last year, a report showed. Exports increased 25 percent from a year earlier, the customs administration said, compared with economists’ projection of 17.5 percent. Imports climbed 28.8 percent, exceeding the 23.5 percent median estimate in a Bloomberg News survey.

EU leaders neared agreement on reducing the bloc’s budget for 2014-2020, after all-night talks in Brussels. They are considering a spending ceiling of 960 billion euros ($1.29 trillion), down from an original proposal of 1.047 trillion euros and less than the 994 billion euros spent in the current budget cycle.

The meeting should be wrapped up today, said a French official who spoke to reporters on condition that he not be identified.

Of the 108 Stoxx 600 members that have reported since Jan. 8, 50 percent exceeded analysts’ profit estimates, according to data compiled by Bloomberg. Earnings for 2012 at companies in the index will drop 1.2 percent, estimates compiled by Bloomberg show.

Software AG advanced 62 cents to 29.09 euros. Germany’s second-biggest software maker said late yesterday it will spend as much as 180 million euros buying back shares.

Credit Agricole

Credit Agricole gained 5.2 percent to 7.23 euros, the most since Nov. 19. BNP Paribas raised its recommendation on France’s third-largest bank to buy from hold, citing the improved credibility of management and higher solvency than estimated.

BNP Paribas added 1.4 percent to 44.16 euros after Bank of America advised buying the shares, saying the lender’s results should confirm it has enough capital to support growth.

B.win Party Digital Entertainment Plc jumped 20 percent to 140.1 pence, the most since December 2011, while 888 Holdings Plc surged 14 percent to 132 pence, its highest price since October 2008.

The British betting companies climbed after New Jersey Governor Chris Christie, who vetoed Internet gambling in 2011, said yesterday he would allow a 10-year trial period of online wagers for games conducted in Atlantic City casinos.

Telecom Italia slipped 1.3 percent to 66 euro cents, its lowest price since Nov. 8, after reporting 2012 earnings before interest, taxes, depreciation and amortization of 11.7 billion euros. Analysts on average had estimated 11.8 billion euros.

TDC A/S retreated 2.3 percent to 40.03 kroner after a person familiar with the matter said a stock sale in Denmark’s biggest phone company has been increased to 120 million shares from 80 million yesterday. UBS AG, which is managing the sale, has enough demand to cover the offer, said the person, who asked not to be identified because the deal is private.

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