European stocks surged this past week by the most in a year, led by a rally in banks and mining companies after Greek lawmakers passed a five-year austerity package, qualifying the country for further aid.

EFG Eurobank Ergasias SA led a rally in Greek lenders, as three of the country’s banks surged 14 percent. Lloyds Banking Group Plc (LLOY) jumped 17 percent after announcing plans to cut costs by 1.5 billion pounds ($2.4 billion) by 2014. Vedanta Resources Plc and Antofagasta Plc climbed with metal prices, surging more than 11 percent. London Stock Exchange Group Plc jumped 9 percent after scrapping its bid for Canada’s TMX Group Inc.
The Stoxx Europe 600 Index jumped 4.1 percent to 274.92 in the past week, snapping eight consecutive weeks of losses. The gauge has still fallen 5.6 percent from this year’s high on Feb. 17 as U.S. economic data trailed forecasts and concern mounted that Europe’s debt crisis would deepen.
“Greece was the big risk event for the week,” said Ioan Smith, a director at Knight Capital Europe Ltd. “Nothing has fundamentally changed, but the implication is that the temporary benefit of the austerity vote has bought time, comforted by the assumption that a new bailout plan is in the works.”
Greek Prime Minister George Papandreou this week won the backing of his country’s parliament to implement the 78 billion-euro ($113 billion) austerity package needed to qualify for further financial assistance from the European Union.
Austrian Finance Ministry official Thomas Wieser said Greece may receive as much as 85 billion euros in new financing, including a contribution from private investors, in a second bailout aimed at stopping the country from defaulting. EU finance chiefs will hold a conference call this weekend to free up a 12 billion-euro payment overdue.
----------------European markets rally
National benchmark indexes climbed in all 18 western European markets this week except Iceland. The U.K.’s FTSE 100 Index increased 5.1 percent, Germany’s DAX Index (DAX) gained 4.2 percent and France’s CAC 40 Index (CAC) jumped 5.9 percent. Greece’s ASE Index jumped 6.2 percent, the most since January.
Alcoa Inc. (AA), the largest aluminum producer in America, will unofficially kick off the second-quarter U.S. earnings season on July 11. Profits at S&P 500 companies will gain 13 percent in the second quarter and 19 percent in 2011 from the year-earlier periods, according to analyst estimates compiled by Bloomberg.
Bank stocks were the best performing industry in the Stoxx 600 this week, surging 7.6 percent, paced by Greece’s three biggest lenders. Eurobank, Alpha Bank SA and National Bank of Greece SA all surged 14 percent in Athens.
-------------------Lloyds, Antofagasta Lloyds led a rally in U.K. banks, surging 17 percent, its biggest weekly advance since August 2009. Britain’s largest mortgage lender said it will cut 15,000 jobs and reduce costs as the company withdraws from overseas units and increases its focus on the U.K.
Standard Chartered Plc (STAN) jumped 10 percent after the U.K.’s third-largest bank by market value said first-half profit before taxes may post “double-digit” growth from a year earlier.
Antofagasta soared 12 percent as copper climbed this week by the most since April. The copper producer’s Chief Executive Officer Jean Paul Luksic said in an interview that the company sees “huge demand” for metals as China and other emerging markets develop.
Vedanta Resources gained 13 percent, Kazakhmys Plc advanced 11 percent and Xstrata Plc jumped 9.3 percent this week.
------------------LSE shares surge
LSE jumped 9 percent after the London and Toronto exchanges said they won’t proceed with their friendly C$3.29 billion ($3.4 billion) merger because they didn’t get the required two-thirds of votes cast by proxy. UBS AG said the bourse may become a bid target.
Charter International Plc soared 42 percent after investment vehicle Melrose Plc said it made a preliminary approach about a 1.3 billion-pound takeover offer.
Melrose, the U.K. investment firm run by a former team at industrial company Wassall Plc, added 6.1 percent after Charter rejected the proposal.
Vestas Wind Systems A/S surged 14 percent after EDF Energies Nouvelles SA agreed to use its turbines for at least half of its land-based wind farms in Europe.
BG Group Plc soared 12 percent after the U.K.’s third- largest oil and gas producer doubled its estimate of reserves and resources in the Santos Basin in Brazil. Partner Galp Energia SGPS SA rallied 9.7 percent in Lisbon.
Cable & Wireless Worldwide Plc paced declining shares, falling 12 percent after the company said full-year profit will miss estimates because of slower-than-expected sales orders. Chief Executive Officer Jim Marsh resigned.
TomTom NV plunged 25 percent after Europe’s largest maker of portable navigation devices slashed its full-year profit and sales forecasts as U.S. demand declined faster than it had predicted.
(Source: Bloomberg)
Highlight: Greek Prime Minister George Papandreou this week won the backing of his country’s parliament to implement the 78 billion- euro ($113 billion) austerity package needed to qualify for further financial assistance from the European Union.