European Stocks Rise as Weber Says Rescue Fund Is Sufficient

European stocks rose as Deutsche Bundesbank President Axel Weber said the euro area rescue fund has sufficient capital to calm financial markets and as real- estate shares increased across the continent.

Capital Shopping Centres Group Plc soared 13 percent, its largest gain since at least 1992, after saying Simon Property Group Inc. may make a cash offer for the company. Rio Tinto Group climbed 2.2 percent, leading basic-resource companies higher across Europe. Bank of Ireland Plc fell for a fourth day, losing 3.8 percent, as CreditSights Inc. said Irish banks may need as much as 30 billion euros ($40.1 billion) of new capital.

The benchmark Stoxx Europe 600 Index rose 0.5 percent to 267.72 at the 4:30 p.m. close in London. The gauge rebounded yesterday as Ireland’s government unveiled a four-year deficit- cutting plan and talks to bail out the country’s banks neared their conclusion. Standard & Poor’s 500 Index futures added 0.3 percent. U.S. markets are closed today for the Thanksgiving holiday.

“The main cause for concern is the debt crisis in peripheral Europe, but overall the fundamental healthiness of the global economy is not affected at all,” said Markus Steinbeis, head of equity portfolio management at the Unterfoehring, Germany-based unit of Pioneer Investments KGmbH, which oversees about $221 billion globally. “There’s no reason to be overly concerned about a big correction. Some investors are still on the sideline.”

Bailout Fund

Axel Weber, who is also a European Central Bank Governing Council member, said there’s no alternative to the European currency union and the bailout fund has enough money to calm markets.

“I think we can rule out” the pessimistic scenario that the fund could be exhausted, Weber said in a panel discussion in Berlin today. “We’ll do everything to safeguard the existence of the euro,” he added.

Contagion from Europe’s sovereign debt crisis has spread to Spain, sparking concern that the bailout fund set up in May isn’t big enough to rescue the euro region’s fourth-largest economy. Spain saw its borrowing costs surge to an eight-year high today.

National benchmark indexes rose in 13 of the 18 western European markets. The U.K.’s FTSE 100 Index gained 0.7 percent and Germany’s DAX Index increased 0.8 percent, while France’s CAC 40 Index advanced 0.3 percent.

Capital Shopping Soars

Capital Shopping Centres jumped 13 percent to 381 pence, the best performance in the Stoxx 600. The company said it received a letter from Simon Property in which the real estate investment trust said it’s mulling an offer for more than Capital Shopping’s net asset value.

Separately, the mall owner agreed to buy the Trafford Centre near Manchester in northwest England for 747.6 million pounds ($1.2 billion) in stock, the highest price ever paid for a British shopping center.

The stock was raised to “hold” from “sell” at Panmure Gordon & Co. Plc.

European real estate shares posted the second-best performance among 19 industry groups, rising 1.9 percent. Hammerson Plc surged 4.8 percent to 405.8 pence, British Land Co. climbed 2.9 percent to 492 pence and Land Securities Group Plc added 2.4 percent to 654.5 pence.

Basic resources shares recorded the best performance on the Stoxx 600, gaining 2.1 percent, as Rio Tinto and Anglo American Plc climbed 2.2 percent to 4,269.5 pence and 2.7 percent to 2,985.5 pence, respectively.

Bank of Ireland

Bank of Ireland, Ireland’s largest bank, slid 3.8 percent to 25.6 euro cents, extending its weekly decline to 47 percent, the biggest in two years. Allied Irish Banks Plc slumped 12 percent to 30 euro cents.

Allied Irish Banks and Bank of Ireland, the nation’s biggest lenders, will probably have to boost their so-called core Tier 1 ratio to 15 percent from 8 percent, analyst Simon Adamson wrote in a note today. Allied Irish needs 9.1 billion euros and Bank of Ireland needs 4.5 billion euros, based on CreditSights’ analysis of the banks’ latest financial reports.

Moody’s Investors Service placed on review for a possible downgrade the short-term bank deposit and debt ratings of Bank of Ireland, EBS Building Society and Irish Life & Permanent Group Holdings Plc, the ratings firm said in a statement today.

Intesa Sanpaolo SpA dropped 1.2 percent to 2.14 euros. Corrado Passera, the chief executive officer of Italy’s second- biggest bank, confirmed that the lender made a binding offer for Polbank, the Polish unit of Greece’s EFG Eurobank Ergasias SA, and is awaiting a response.

Daily Mail & General Trust Plc slumped 3.5 percent to 544.5 pence after the publisher of Britain’s Daily Mail newspaper said sales declined 4.6 percent to 1.97 billion pounds, compared with the 1.99 billion-pound average estimate of 14 analysts surveyed by Bloomberg