EQUITIES ADVANCED across all 18 western European stock markets yesterday as better than expected US data eased concerns over the strength of the global economy ahead of the EU leaders’ crunch summit which begins in Brussels today.
US economic data showed durable goods climbed more than forecast in May, easing concern that US manufacturing is faltering.
The approaching month-end (and half-year end) may also have been behind some of the positive moves, a Dublin broker speculated, as some investors may be required to cover short positions ahead of that deadline.
DUBLIN
THERE WAS plenty of stock-specific news to drive the Irish market and the Iseq finished the day more than 1 per cent up.
In an interim management statement (IMS) issued ahead of its agm, cider and beer maker CC said its first-quarter results had been hit by poor weather, but nonetheless predicted earnings growth for the full year. This was well received by the market and CC stock rose about 2 per cent, or 5½ cents, to almost €3.23.
“There was a lot of fear coming into this,” said one trader. “The stock had been coming under pressure over the last week or so.”
In light of the poor weather investors had been wondering whether management would talk down expectations, or even issue a profit warning, he said, but beer sales and exports took up the slack left by weak cider revenues.
Biotechnology firm Elan rose 1 per cent, or 12.5 cents, to about €11.78 after the stock was upgraded by a European brokerage.
Cement names were strong across markets and CRH led the Iseq higher, adding over 3 per cent to close at €14.10.
Packaging giant Smurfit Kappa closed almost 6 per cent higher, or 28 cents, at €5.05.
LONDON
UK STOCKS climbed for the first time in five days. BG led energy companies higher as oil rose as much as 2 per cent in New York.
BG rallied 3.8 per cent to 1,256 pence, BP advanced 1.7 per cent to 408.5p and Royal Dutch Shell, Europe’s largest oil company, added 1.4 per cent to 2,106p.
Standard Chartered rallied 3.1 per cent as Britain’s second- largest bank by market value reiterated its forecast. The bank is “comfortable” with estimates for 2012 pretax profit of $7.46 billion, said finance director Richard Meddings said. This represents a 10 per cent increase on last year’s $6.78 billion figure.
Barclays and Royal Bank of Scotland also rebounded from four days of losses. The shares advanced 1.9 per cent to 196.05p and 2.4 per cent to 233.1p respectively. Lloyds gained 3.5 per cent to 31.16p after the Financial Times reported the lender may sell 630 branches to Co-Operative Group.
The FTSE 100 Index rose 1.4 per cent at the close in London, the biggest gain since June 19th.
The FTSE had lost 3.1 per cent over the previous four days amid concern this week’s EU summit in Brussels on Europe’s debt crisis.
EUROPE
EUROPEAN STOCKS rose the most in a week after US data beat estimates and speculation mounted that China will introduce additional economic stimulus.
France’s CAC 40 rose 1.6 per cent and Germany’s DAX Index gained 1.5 per cent.
Portugal Telecom advanced 3.1 per cent to €3.42 after the telecommunications company announced a €200 million plan to buy back shares for the fiscal years 2012 to 2014. The company said it will pay an annual cash dividend of 32.5 cent a share for those years.
Colruyt K+S, Europe’s biggest potash producer, jumped 6.9 per cent after analysts raised their ratings on the stock. Bank of America upgraded the stock to buy from underperform, while BHF-Bank raised its recommendation to overweight from market weight.
US
US STOCKS rose in early trade following upbeat economic data. Demand for long-lasting US manufactured goods rose more than expected in May and contracts to buy homes on resale matched a two-year high.
The PHLX housing sector index rose 3.6 per cent, taking the year- to-day gains to near 26 per cent.
Shares of Lennar rose 4.7 per cent to $28.69 after the US homebuilder reported a rise in new orders for the fifth straight quarter.
The Dow Jones industrial average was up 0.61 per cent in early trade. The Standard Poor’s 500 Index was up 0.79 per cent, also in early trade.
Some of Wall Street’s top analysts have published their research on Facebook and most are cautiously optimistic.
Facebook shares fell 1 per cent to $32.77 after gaining more than 20 per cent in the past two weeks.
Apple shares edged 0.6 per cent higher and Google gained 1.4 per cent after reports the company will soon unveil a tablet co-branded with Taiwan’s Asustek Computer and priced to compete with Amazon’s Kindle Fire.
O-Reilly Automotive tumbled 14.7 per cent a day after the carparts retailer revised its outlook. –(Additional reporting Bloomberg, Reuters)
