US job figures reverse morning slump
EUROPEAN STOCKS rebounded from early losses yesterday afternoon after positive US jobs data offset renewed concern over Europe’s financial health.
A rise in Spanish bond yields combined with disappointing German industrial production numbers sent markets lower across Europe in early trade yesterday.
European bourses were trading almost 1 per cent lower across the board at one point during the morning session. However, encouraging jobs data out of the US in the afternoon helped to reverse this slump, and markets recovered into the close.
The Iseq index closed fractionally down after a volatile day’s trading.
DCC slipped just 15 cent – less than 1 per cent – to €18.65 despite the announcement that its acquisition of a number of businesses from Total Downstream UK has been referred to the British Competition Commission by the Office of Fair Trading. A Dublin broker noted that the competition commission was not expected to report its findings until September 18th, so yesterday’s announcement was “not massively price-sensitive”.
Aer Lingus slipped more than 1 per cent to 95 cent despite announcing that traffic rose 8.2 per cent year-on-year in March.
UK stocks rose, with the FTSE 100 Index rebounding from its largest decline since November as a rally in basic resource shares reversed earlier losses.
BHP Billiton and Rio Tinto, the biggest London-listed mining companies, advanced more than 1 per cent as copper climbed in New York for the first time in three days.
British Sky Broadcasting sank to a seven-month low as the pay-TV broadcaster in which Rupert Murdoch’s News Corp owns a 39 per cent stake, said its Sky News channel approved the hacking of emails on two occasions.
The FTSE 100 gained 19.9 points, or 0.35 per cent, to 5,723.67 at the close in London. The gauge declined as much as 0.7 per cent earlier as British manufacturing output unexpectedly contracted and concern about the euro area debt crisis resurfaced.
The FTSE All-Share Index rose 0.3 per cent.
Commodity companies proved the biggest gainers across Europe.
Glencore, the largest publicly traded commodity supplier, rallied 5.8 per cent to 411.8 pence, leading a rebound in commodity stocks. Xstrata jumped 3.5 per cent to 1,112 pence.
Vedanta Resources gained 2.1 per cent to 1,235 pence.
Among the losers was UniCredit, Italy’s biggest lender, which slid 3.1 per cent to €3.31, Banca Popolare di Milano Scarl, which lost 4 per cent to €35.20, Commerzbank which declined 1.9 per cent to €1.75, and BNP Paribas which dropped 1 per cent to €32.88.
The Stoxx 600 climbed 0.1 per cent to 259.07 at the close, erasing a decline of as much as 0.9 per cent.
“Negative sentiment has turned positive,” said Angus Campbell, head of market analysis at Capital Spreads in London.
“The reversal in the market is yet another encouraging sign there there is still risk appetite out there if stocks suddenly present another buying opportunity.”
US stocks traded flat to slightly higher in early trade yesterday as government data showed the number of Americans submitting claims for new jobless benefits fell to the lowest in nearly four years last week, indicating the labour market is slowly improving.
The data comes ahead of a key employment report due today, when the stock market is closed for the Good Friday holiday.
Investors kept watch on Spain and its ability to meet budget targets in the wake of the Spanish government’s poorly received bond sale on Wednesday which triggered fears about funding difficulties for weaker euro zone countries as the effects of the ECB’s huge liquidity injections may be diminishing.
In early trade, the Dow Jones industrial average slipped 11.09 points, or 0.08 per cent, to 13,063.66. The Standard & Poor’s 500 Index inched up just 0.02 of a point, or unchanged on a percentage basis, to 1,398.65.
Some retailers’ shares advanced after they reported March same-store sales that topped forecasts as mild weather and an early Easter spurred consumers to shop for seasonal items last month.
The stronger-than-expected March sales prompted some retailers to raise their profit expectations for the quarter.
Bed Bath & Beyond jumped 9 per cent to $72.18 a day after the home goods retailer posted quarterly results that exceeded Wall Street’s expectations.
PPG Industries climbed to an all-time high of $98.54 after the chemical-maker forecast first-quarter profit above Wall Street’s expectations and said it would lay off 2,000 workers, mostly in Europe, due to weak demand.
(Additional reporting - Reuters, Bloomberg)