MARKETS ROSE across Europe yesterday, fuelled by hopes that central banks will launch fresh measures this week to stem the global economic slowdown. In the US however, the rally has started to slow.
DUBLIN
THE IRISH market rose in line with its peers across Europe yesterday, advancing by 45 points, or 1.4 per cent, to climb to 3,190 points, with most stocks finishing the day in the black.
On a day which was otherwise devoid of stock specific news, Ryanair’s numbers for the second quarter of the year was the main headline.
While the results, which saw the airline post a 29 per cent drop in profit for the three months to the end of June, were deemed “a bit of a disappointment” by analysts, the market didn’t seem to agree and the stock finished up on the day in “healthy enough” volumes.
After falling off early in the morning, it closed up by 10 cent, or 2.4 per cent, at € 4.00.
Drinks group C&C was one of the busiest names outside of Ryanair.
It added 13 cent, or 3.8 per cent to advance to €3.51, although brokers noted that volume “wasn’t huge” in the stock.
A strong performance from index heavyweight CRH also helped to push the Iseq up, as it advanced by 38 cent, or 2.5 per cent, to € 15.65.
One of the few stocks to fall back on the day was Elan, which gave up 7 cent, or 0.7 per cent, to close down at € 9.47.
The stock has struggled since one of its key Alzheimer’s drug failed a trial last week.
Grafton Group also went against the trend yesterday. It lost 3 cent, or 1.1 per cent, to fall back to € 2.82.
LONDON
STRENGTH IN risk-sensitive energy, miners and banking stocks propelled Britain’s top share index back up to touch the 5,700 level yesterday, amidst expectation that central banks around the world will act this week to reverse the global slowdown.
The FTSE 100 index closed up by 66.42 points, or 1.2 per cent at 5,693.63 points, just holding below the 5,700 level breached intraday for the first time in 10 days, though volume was modest at 69 per cent of the 90-day daily average.
“Overall, volumes were rather low today as the summer season kicks off and Olympic Games are in full swing. We can expect continued volatility heading into August, together with some position squaring,” said Ishaq Siddiqi Market Strategist at ETX Capital in a note.
Banking shares were higher on hopes for central bank action. The sector’s first-half results season was continued by global giant HSBC, shares in which gained 2.3 per cent in strong volumes. Europe’s biggest bank reported a 3 per cent dip in underlying profit and said it had made a provision of $700 million to cover “certain law enforcement and regulatory matters” after a US Senate report this month criticised HSBC for letting clients shift funds from dangerous and secretive countries.
Publishing group Pearson was the biggest individual blue chip faller, losing 3.3 per cent, weighed down by a hangover from an earnings disappointment on Friday.
EUROPE
ACROSS EUROPE, markets rose on expectations of ECB intervention, with stocks rising to their highest level since April.
The benchmark Stoxx Europe 600 Index gained 1.6 per cent to 263.94 at the close in London, completing a three-day rally of 5.4 per cent, the largest since November.
German stocks advanced to a three month high, as the DAX Index gained 1.3 per cent to 6,774.06 in Frankfurt, for the fourth successive day of advance. K+S AG rallied 2.7 per cent after reporting second-quarter profit that exceeded estimates. Siemens AG rose 3.4 per cent after a report said ThyssenKrupp AG will not merge with the company. Deutsche Telekom AG dropped 0.7 per cent as a report said rivals to its T-Mobile Austria division may seek access to the telecommunications network of Hutchison Whampoa Ltd.
In France, the CAC 40 closed up by 1.2 per cent. Air France-KLM Group, Europes biggest airline, surged the most since its formation more than eight years ago as the introduction of a €2 billion savings plan helped halve its second-quarter loss. It closed almost 73 cents or 19 per cent higher at €4.62 in Paris.
US
IN THE US, Wall Street slipped after its best two-day run this year, with the three major US stock indexes touching session lows in early trading, amidst fears that the rally has out-paced the country’s economic outlook.
The Federal Reserve is due to meet today, and on Friday, the non-farm payrolls data will be released.
“You have the jobs report on Friday, the Fed meeting before that and that’s getting people a little nervous,” said Keith Wirtz, chief investment officer for Fifth Third Asset Management in Cincinnati. (Additional reporting: Bloomberg/Reuters)
