EUROPEAN EQUITIES strengthened yesterday as hopes of a Greek resolution grew. Investors were also heartened by positive corporate news flow and recent upbeat economic data coming out of the US. However, trading volumes were quieter than normal as US markets were shut for Presidents’ Day.
DUBLIN
THE IRISH market continued its good run of form, gaining another 1 per cent.
Bank of Ireland moved higher on decent volume after announcing that pretax losses narrowed for 2011.
The stock closed more than 4 per cent higher at 14.6 cent, with about 85 million and 120 million shares traded in Dublin and London respectively.
Insulation manufacturer Kingspan enjoyed a pretty strong move in the morning session and finished 4.4 per cent, or 32 cent, ahead at €7.60.
Bakery group Aryzta was reasonably strong in the afternoon, and closed more than 4 per cent up, or €1.49, at €37.05.
Ryanair moved in the opposite direction, shedding 10 cent to close just under €4.22. However,brokers said this was an anomaly as there was no real news out on the stock.
LONDON
UK STOCKS rose to a seven-month high as China cut banks’ reserve requirements to spur growth and euro area finance ministers met to discuss a Greek bailout.
Rio Tinto and BHP Billiton advanced more than 2 per cent as China’s decision boosted demand for base metals. CSR, the UK maker of chips used in Nokia Oyj mobile phones, jumped 21 per cent after reporting a narrower-than-estimated loss.
Misys, the financial-software maker that agreed to merge with Swiss competitor Temenos this month, soared 6.6 per cent after attracting a bid from Vista Equity Partners. Misys received a non-binding proposal from Vista to acquire all outstanding shares in cash, Misys said yesterday.
The benchmark FTSE 100 Index gained 40.18, or 0.7 per cent, to 5,945.25 at the close in London, the highest level since July 8th.
The gauge has advanced 20 per cent from its low in October as the ECB increased lending to banks and US economic reports exceeded estimates.
“The Chinese central bank cutting reserve requirements for China’s banks has fuelled speculation that this will help industrial production, boosting UK commodity shares,” said David Jones, the chief market strategist at IG Index in London.
“Although we can all be allowed a degree of scepticism regarding an imminent solution to the Greek bailout, investors still seem happy to look for excuses to buy, and stock markets still seem to have plenty of momentum, even considering how far they have come in recent months.”
EUROPE
EUROPEAN STOCKS rose for a fourth day, extending a six-monthhigh.
TNT Express surged 60 per cent after rejecting a takeover offer from United Parcel Service. PostNL, a shareholder in TNT, jumped 50 per cent. BP advanced after an Oppenheimer analyst said the company may reach a settlement this week on the Gulf of Mexico oil spill.
The Stoxx Europe 600 Index climbed 0.8 per cent to 268.16 at the close of trading. The benchmark gauge has rallied 9.7 per cent this year.
Finance ministers met in Brussels yesterday to weigh the terms of new loans to Greece and a possible contribution by central banks.
They also aim to start a bond exchange with private investors meant to stave off a Greek bankruptcy next month. China cut the amount of cash that banks must set aside as reserves for the second time in three months to spur lending.
National benchmarks gained in 17 of the 18 western European markets. France’s CAC 40 Index advanced 1 per cent, while Germany’s DAX index added 1.5 per cent.
US
STOCK MARKETS were closed yesterday for the Presidents’ Day public holiday. However, US stock-index futures rose yesterday.
“We have the US economy accelerating with the job data and housing data also beginning to look pretty good,” said Peter Garnry, an equity strategist at Saxo Bank. “We think it is in most countries’ interest to preserve the European Union and the euro. We think there will be a deal.”
The SP 500 advanced 1.4 per cent last week as investors speculated that the euro area will provide further financial aid to Greece and as better-than-estimated reports on manufacturing, housing and jobless claims bolstered optimism in the world’s largest economy.
Of the 383 SP 500 companies that have reported results since January 9th, some 268, or 68 per cent, have posted per-share earnings that beat projections. – (Additional reporting Bloomberg)
