European stocks rise as investor confidence up on strong earnings reports and data

Iseq closes session higher as index heavyweight CRH posts solid performance

CRH gained 0.26% to finish at €17.105. Photograph: Brenda Fitzsimons

CRH gained 0.26% to finish at €17.105. Photograph: Brenda Fitzsimons

Tue, Aug 13, 2013, 21:55

Better than expected company earnings and a boost for German investor confidence drove increases in most European markets yesterday, although the benchmark Irish index finished weaker than most others.

James Buckley, asset manager with Baring, said a bias towards companies meeting or beating expectations, coupled with better data coming out of Europe and easing fears over Chinese growth, have contributed to confidence. “It’s all produced a positive environment for European equities,” he told news agency Bloomberg.

Ryanair appeared to shrug off concerns generated by a programme aired by British broadcaster Channel 4, questioning safety at the low-cost airline. Its stock made up much of the ground it lost yesterday ahead of the documentary being broadcast, and broke back through the €7 mark.

However, it gave up most of the gains later in the session, closing just 0.5 per cent up at €6.965. Ryanair has denied the allegations made in the programme and says it intends suing the broadcaster.

Index heavyweight, CRH, gained 0.26 per cent to close at €17.105. Dealers said that while the advance was not large, the building materials giant has been performing well of late, along with several of its peers.

The group this week confirmed that its Indian joint venture partner has bought local cement producer, Sree Jayajothi, for €175 million. CRH will publish interims next week.

Titanium miner Kenmare Resources put in one of the day’s stellar performances, gaining 4.29 per cent to close at 36.5 cent.

Elsewhere, Bank of Ireland added 2.42 per cent to close at 21.2 cent. The lender, which is 15 per cent State-owned, has been rehabilitated with the markets in recent months and its market cap at the close was just short of €6.4 billion.

Michael Page International lost 4 per cent to 450.2 pence. The UK recruitment company said the three months through September will be “another challenging quarter” after first-half gross profit fell 4.4 per cent.

Fresnillo rallied 5.6 per cent to 1,165 pence, for a fifth day of gains, as UBS AG initiated coverage of the gold and silver producer with a buy rating. Analysts led by Daniel Major cited the company’s low costs and ability to generate free cash flow even as the price of precious metals slips.

Germany’s biggest utility, E.ON, rallied 2.2 per cent to €12.50, the biggest gain since June 26th. The company reported first-half underlying net income of €1.91 billion, topping the average analyst estimate of €1.79 billion. Its next largest rival, RWE AG, increased 4.5 per cent to €22.36, the biggest jump in four months.

GAM Holding jumped 9.7 per cent to 16.90 Swiss francs, the largest gain since April 2009. The asset manager that split from Julius Baer Group almost four years ago said first-half profit more than tripled after fee and commission income increased.

Schindler Holding AG slid 5.2 per cent to 136 francs, the biggest decline in almost two years, after the Swiss elevator maker cut its profit forecast.

US stocks rose earlier in the session as improved retail sales figures gave investors further positive signs that the world’s biggest economy may be recovering. Hewlett-Packard rose 1.9 per cent, the most in the Dow, to $27.35. Analysts believe the personal computer maker’s quarterly results may beat expectations when they are published next week.

Xerox rose 3.4 per cent to $10.49. The printer and copier maker pioneer was raised to buy from neutral at Citigroup on expectation that the company will benefit from the Obama healthcare law in 2014. Eli Lilly gained 2 per cent to $55.14. The pharmaceutical company said a study found a drug it is developing is tied to increased survival of patients with a type of lung cancer. – (Additional reporting: Bloomberg)