Markets surge on the back of reported US debt deal

European stocks rose in the final two hours of activity as the news filtered through, reversing declines seen earlier in the day

US stocks  surged, as the gains brought the S&P 500 within striking distance of the record high set on September 18th. Photographer: Julia Schmalz /Bloomberg

US stocks surged, as the gains brought the S&P 500 within striking distance of the record high set on September 18th. Photographer: Julia Schmalz /Bloomberg

Wed, Oct 16, 2013, 20:00



The Iseq followed other exchanges in Europe and the US skywards towards the end of trading yesterday, as euphoria and relief swept through the markets after a deal was reached across the Atlantic to reopen the federal government and raise the US debt limit.

European stocks rose in the final two hours of activity as the news filtered through, reversing declines seen earlier in the day. Bourses climbed in 14 of the 18 western-European markets.

The Iseq climbed 0.8 per cent while the FTSE 100 rose 0.3 per cent and Germany’s DAX added 0.5 per cent. France’s CAC 40, bucked the trend, decreasing 0.3 per cent.

US stocks also surged, as the gains brought the S&P 500 within striking distance of the record high set on September 18th.

DUBLIN
Bank of Ireland caught the eye on the Iseq yesterday, surging 5.83 per cent to close at 25.4c. Traders attributed the rise – on the back of heavy volumes – to positive sentiment from Tuesday’s budget. The bank is considered best-placed of the Irish institutions to capitalise on any improvement in the economy.

Independent News & Media continued its good run, climbing 15 per cent to close at 84c. The stock has been popular with investors since a trading statement during the week in which it said there had been a noticeable improvement in the advertising market since June.

Smurfit Kappa rose almost 2.6 per cent to €18.10, after the packaging and paper giant announced a price increase for recycled containerboard in Europe.

LONDON
IMI gained 1.9 per cent to almost £1.53 after the engineering group said it will return £620 million to shareholders after agreeing to sell its vending-machine business to Marmon Group, owned by Warren Buffett’s Berkshire Hathaway, for about $1.1 billion.

ITV rose 1.7 per cent, with traders citing extra anticipated advertising revenue from the World Cup in Brazil next year, after England qualified for the tournament on Tuesday night. Football’s showpiece competition is a bonanza for consumer brands.

British investment manager Hargreaves Lansdown rallied 4.8 per cent as brokers began raising targets for the firm the day after it reported record assets under management. Jeffries raised its target price by 10 per cent to £1.15 and repeated its “buy” rating on the stock.

EUROPE
Danone slid 2.3 per cent after the yogurt maker lowered its full-year forecast, following after a product-safety scare that hurt cashflow in China.

LVMH dropped 4.3 per cent, the most in more than a year, as the world’s largest luxury-goods company said revenue from its fashion and leather-accessories business slowed in the third quarter. Shares in French car maker Peugeot Citroen tumbled 4.4 per cent, extending its losses this week to 17 per cent. The stock has been knocked by mounting fears the company will need a massive capital increase. The stock has been targeted by short sellers.

NEW YORK
BlackRock, the world’s largest money manager, said its third-quarter profit grew 15 per cent amid strong global demand from its retail and institutional clients. The stock was up 2.1 per cent at $288.11.

Mattel climbed 2.5 per cent to $42.59. The world’s largest toymaker topped estimates as sales of Barbie and American Girl gained. The company has been trying to boost sales amid lacklustre growth of the toy industry in the US, as children spend more time using electronic devices. Stanley Black and Decker, the maker of power tools and electronic security systems, tumbled 13 per cent to $77.49. The company cut its full-year earnings outlook on slower-than-anticipated improvement in margins in its security business and weakness in emerging markets, as well as uncertainty created by the US government shutdown. – (Additional reporting: Reuters /Bloomberg)

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