Investors lock in profits after rally
Global equities stalled yesterday, with weak economic data from the US and concerns about the scope for more stimulus in China giving investors the excuse to lock in profits on a new-year rally to multi-month highs.
The euro rose against the dollar to its highest since April in the wake of encouraging remarks from the head of the European Central Bank.
The Iseq suffered a little, finishing the day worse off than its European counterparts. The Dublin market fell 0.53 per cent to 3,481.48.
Paddy Power and Kerry group were the worst performers of the bigger names, both falling more than 1.4 per cent to finish at €60.70 and €38.75 respectively.
Also down was building materials company Kingspan, which declined 2.19 per cent to finish at €8.71, and pharmaceutical firm Elan, which slid 4.67 per cent to close at €7.75.
However, one major stock that did well was budget airline Ryanair, which was up 1.14 per cent to €5.31.
The airline has had “a great run in recent days, it has been very strong and is still wanted”, one Dublin stockbroker said.
UK stocks climbed for a third day, extending the highest level in more than 4½ years, as Japan’s government announced a package of stimulus measures.
Barclays led an advance in banks. It gained 1.7 per cent to 299.65p and Royal Bank of Scotland increased 1 per cent to 360.4p. Lloyds added 1.4 per cent to 54.04p.
Debenhams slid 9.9 per cent. The UK’s second largest department store chain cut its forecast for full-year margin growth as it expanded sales promotions.
Tullow Oil, the UK explorer focusing on Africa and Latin America, tumbled 7 per cent after saying it more than doubled 2012 write-offs related to unsuccessful wells in Ghana, Guyana and Suriname.
The FTSE 100 rose 20.07 points, or 0.33 per cent, to 6,121.58 at the close in London, the highest level since May 2008. The benchmark gauge has climbed 0.5 per cent this week, extending last week’s 2.8 per cent rally.
European stocks fell in the second week of 2013 amid the highest valuation in 11 quarters for the benchmark Stoxx Europe 600 index and concern that quickening inflation in China will limit the scope for economic stimulus.
Banco Popolare led banks higher after global central-bank chiefs eased a liquidity rule.
Deutsche Lufthansa retreated 1.8 per cent as UBS cut its rating on the stock.
SAP rose 1.2 per cent after unveiling a software overhaul.
The Stoxx 600 dropped 0.3 per cent to 287.08 this past week. France’s Cac 40 dropped 0.6 per cent, while Germany’s Dax lost 0.8 per cent.
US stocks ended little changed as investors took a step back from buying ahead of next week’s busy corporate earnings calendar.
The SP 500 has gained 5 per cent over the past two weeks to take the benchmark to five-year highs.
Wells Fargo set a weak tone yesterday after it reported results. It showed lower fourth-quarter net interest margin – a key measure of how much money banks make from loans – even as profit jumped. It ended down 0.8 per cent at $35.10, while bank shares weighed on the broader market. The SP 500 financial sector index fell 0.3 per cent after rallying more than 1 per cent on Thursday.
Boeing weighed on the Dow after a cracked cockpit window and an oil leak on flights in Japan added to problems with some of its Dreamliner 787s, compounding safety concerns about the new aircraft. It fell 2.5 per cent to $75.16.
Best Buy rallied after its results showed a small turnaround in US stores, though same-store sales were flat during the key Christmas season. Its shares jumped 16.4 per cent to $14.21. – (Additional reporting: Bloomberg, Reuters)