Europe finishes quarter up nearly 7%

Dow Jones: 13,212.04 (+0.50%) Nasdaq: 3,091.57 (-0.12%) SP 500: 1,408.47 (+0.37%)

EUROPEAN MARKETS rallied yesterday, ending the quarter up almost 7 per cent. This marked their best first quarter since 2006, following the announcement that euro zone finance ministers had agreed to a temporary increase to the euro zone’s rescue fund, the European Financial Stability Fund.

DUBLIN

ON THE last trading day of the first quarter of 2012, the Iseq closed up a half a per cent to 3,255, marking the end of a very strong quarter for the Irish equity market.

Financial stocks continued to be a focus for the market, with AIB reporting full-year results yesterday. The majority State-owned bank reported a full year net loss of €2.3 billion, with an underlying loss of €5.9 billion.

Disappointing mortgage arrears figures were also a feature of the results. AIB stock closed down 2 per cent at €0.089.

Financial services company IFG added 0.7 per cent to finish at €1.46, after the company announced on Thursday that it had sold its international division to private equity fund manager AnaCap for £70 million.

Paddy Power closed down 0.7 per cent after its Australian subsidiary, Sportsbet, was unsuccessful in appealing a legal decision related to a 1.5 per cent turnover tax.

Datalex rose 2 per cent to €0.50, following full-year results which showed a 4 per cent rise in revenue to $28 million, broadly in line with forecasts.

Ryanair closed up 1.6 per cent at €4.48, following a share buy-back by the airline.

EUROPE

EUROPEAN share prices snapped a three-day losing run ending the quarter up almost 7 per cent, after euro zone finance ministers agreed on a temporary boost of its rescue capacity.

Spain also announced deep cuts to its central government budget, targeting savings of €27 billion for the rest of 2012 from the central government budget, equivalent to about 2.5 per cent of GDP.

Mining and steel stocks led the risers across Europe, with Anglo American and ArcelorMittal both up 1.7 per cent, boosted by rising base metal prices.

HM dropped 4.9 per cent to 238.1 kroner in Stockholm, the largest decline since September, after reporting first-quarter profit that missed analysts’ estimates.

Inditex, Europe’s biggest clothing retailer, slipped 1.7 per cent to €70.87 in Madrid trading.

Car stocks – the best performing sector so far this year with a gain of nearly 30 per cent – also featured among the biggest gainers yesterday, with Daimler adding 2.4 per cent and BMW gaining 2.8 per cent.

Banca Popolare di Milano, the oldest Italian co-operative bank, plunged 14 per cent after posting a net loss of €614 million in 2011 after a goodwill writedown of €336 million in the fourth quarter.

Banca Monte dei Paschi di Siena tumbled 11 per cent after posting a record loss of €4.99 billion in its fourth quarter.

The FTSEurofirst 300 index of top European shares ended up 0.9 per cent at 1,069.03 points, while the blue chip Euro Stoxx 50 won 1 per cent. Around Europe, UK’s FTSE 100 index was up 0.46 per cent, France’s CAC 40 gained 1.26 per cent and Germany’s DAX index rose 1.04 per cent.

LONDON

THE FTSE 100 Index, which has suffered three days of declines, closed 26.4 points higher as traders picked up banking and mining stocks which had been hit by the mid-week retreat.

London’s blue chip shares index has added nearly 200 points since the start of 2012, despite hefty falls in the mid-week amid fears about the strength of the recovery in the US and fresh gloom about the euro zone debt crisis.

FirstGroup plunged 18 per cent after the British bus and train operator said its bus business faced “challenging trading conditions”.

Banks benefited from the improved sentiment, with Barclays up 1.1p at 235.3p, HSBC adding 7.7p to 554.8p and Lloyds rising 0.2p to 33.6p.

The heavily-weighted mining sector also drove the market higher. Antofagasta was up 30p to 1152p and Rio Tinto jumped 70.5p to 3446p.

US

US STOCKS ended their strongest quarter in more than two years on a positive note yesterday, led by recently underperforming consumer staples and healthcare sectors.

Walt Disney, the largest US entertainment company by market value, rose 1.8 per cent for the biggest gain in the Dow Jones Industrial Average after Lazard recommended buying the shares.

Pfizer and Hewlett-Packard also rose more than 1 per cent to pace gains in the Dow, which completed an 8.1 per cent first-quarter rally.

Dow Chemical and Monsanto advanced with commodities.

Apple fell 1.7 per cent and pared its first-quarter rally to 48 per cent after an audit of Foxconn Technology, its biggest manufacturer, found “serious and pressing” violations of Chinese labour laws.

Stocks had started higher after commerce department data showed consumer purchases rose 0.8 per cent in February, the largest gain since July. – (Additional reporting: Bloomberg/ Reuters)