European Stocks Advance as China Backs Germany in Crisis

European stocks rose as Chinese Premier Li Keqiang said his country will rely on Germany to lead the euro out of its crisis and boost the global economy as European leaders begin to tackle soaring unemployment after three years of budget cuts. Asian shares fell.

SAP AG (SAP) rose 0.7 percent after ending talks to buy Jive Software (JIVE) Inc. Club Mediterranee (CU) SA, the French holiday-resort operator, jumped 24 percent after saying that it got a friendly bid from two shareholders.

The Stoxx Europe 600 Index climbed 0.3 percent to 304.28 at 8:08 a.m. London time. European stocks posted their first weekly loss in more than a month last week as investors debated when the Federal Reserve will scale back momentary stimulus, Chinese manufacturing unexpectedly shrank and Japanese markets slid. U.S. markets are closed for the Memorial Day holiday today. The MSCI Asia Pacific Index fell 1.3 percent.

"We have a mixed situation on the trading floor," Roger Peeters, chief executive officer at Close Brothers Seydler Research in Frankfurt, wrote in a note. "On the one hand, the strong uptrend over the last few months has giving investors the awareness that markets have a strong momentum, which is not expected to turn suddenly. On the other hand, the solid and strong losses in Japan, which also had some serious consequences on the development in Europe, have underlined the dependence of this bull market on cheap money stimuli."

Li, on the final stop of his first trip as Chinese leader, said the government in Beijing will continue to stand by the EU. He said the fact that Germany was the only EU nation he visited underscored its position and the "very, very important" ties between Germany and China.

Resolve Difficulties

"We earnestly hope that the EU resolves these temporary difficulties, and we hope that the euro area can remain stable," Li told reporters as he stood beside Merkel yesterday in Berlin. A strong euro "is also a good thing for China's own development -- and good for the whole world."

German consumer confidence will jump to the highest in more than 5 1/2 years in June as low unemployment and receding inflation encourage households to spend, GfK AG said.

The market research company forecast today that its consumer-sentiment index, based on a survey of about 2,000 people, will increase to 6.5 next month from 6.2 in May. That would be the highest since September 2007. Economists expected the index to remain unchanged, according to the median of 26 estimates in a Bloomberg News survey.

Jobless Proposals

Germany and France are due to announce joint proposals tomorrow to address youth unemployment under the banner of a "New Deal for Europe." The blueprint may involve the European Investment Bank "leveraging" 6 billion euros available through 2020 from the EU to yield as much as 60 billion euros in loans to tackle joblessness, Germany's Rheinische Post reported May 13.

The plan will be aired by the German and French finance ministers, Wolfgang Schaeuble and Pierre Moscovici, and by the respective labor ministers, Ursula von der Leyen and Michel Sapin, in the French capital.

SAP AG added 0.7 percent to 59.06 euros. The world's largest maker of business-management software held discussions within recent weeks to acquire Jive Software, which has a market value of more than $1 billion, people familiar with the matter said.

SAP quit talks with Jive, which makes social-networking applications for businesses, after a thorough review of the company, said the people, who asked not to be named because the matter is private.

Club Mediterranee

Club Mediterranee soared 24 percent to 17.12 euros, its biggest gain on record, after it said that Axa Private Equity and Fosun Property made a friendly bid for the French tour operator.

Club Mediterranee has set up a committee to assess the offer, and has suspended its share buyback program. The company also reported first-half income of 18 million euros, compared with 17 million euros a year earlier.

Fiat SpA, Italy's largest carmaker, climbed 3.2 percent to 5.60 euros. The Italian government will ask Chief Executive officer Sergio Marchionne what it "can do to let the carmaker keep its plants in Italy," Industry Minister Flavio Zanonato said in a television interview with Sky Tg24. "We should find a way to match Fiat's interest with the country's," he said.