Markets wait on Federal Reserve policy

Wed, Jan 30, 2013, 00:00

Stock markets were mostly higher yesterday as US treasury prices edged down and the dollar fell to a 14-month low against the euro, with investors cautious about a two-day Federal Reserve policy meeting.

European shares consolidated near two-year highs and oil prices steadied as investors seeking evidence of a lasting economic recovery awaited US data and the Fed Reserve policy decision.

DUBLIN

The Iseq index finished the day largely unchanged, gaining just one point or 0.04 per cent to close at 3,556.

Ryanair was one of the top performers following positive financial results on Monday, closing the day up 1.2 per cent at €5.60 yesterday.

Drinks group CC was also reasonably well wanted, finishing the day up 1.19 per cent at €4.75. “There are thoughts that the company has been undervalued recently and there is a little push on them,” according to one stockbroker.

Building materials giant and index heavyweight CRH finished the day up less than one per cent at €15.90. However, data released on Monday points to a sustained recovery in the US housing market, which bodes well for CRH, according to NCB Stockbrokers.

Some food companies including Glanbia and Aryzta underperformed, finishing the day down.

LONDON

London’s top flight index closed above 6,300 for the first time in more than 4½ years yesterday as progress by heavyweight stocks helped keep up the new year rally.

Investors welcomed greater clarity from Anglo American on its troubled Minas Rio iron ore project, helping shares in the miner to add 3 per cent.

In contrast, banks suffered, with Royal Bank of Scotland off 6 per cent after the Wall Street Journal reported that the lender is close to a £500 million settlement with US and British authorities over Libor, returning the interbank rate-fixing scandal to the front of investors’ minds.

Shares in Britain’s biggest supermarket Tesco gained 1 per cent after new figures showed it had outpaced its three main rivals by notching up the best sales growth of the “big four” grocers.

The FTSE 100 index was able to build on its best start to a year in more than two decades, closing up 44.78 points to 6339.19, after strong performances from BP, Centrica and Rio Tinto.

EUROPE

European stocks rose to the highest level in more than 23 months as companies reported earnings and a report showed house prices in 20 US cities increased.

Philips climbed 2.3 per cent to €22.43 after the world’s largest lighting manufacturer reported fourth-quarter results that topped analyst estimates.

Saipem, Europe’s largest oil contractor by market value, fell 3.8 per cent to €30.37.

The Stoxx 600 earlier fell as much as 0.2 per cent as US consumer confidence declined more than forecast and as investors await the outcome of the Federal Reserve’s policy meeting.

US

US stocks advanced, sending the Dow Jones Industrial Average to a five-year high, as companies including Pfizer and Valero Energy reported earnings that beat estimates.

Pfizer rose 3.1 as the drugmaker also forecast higher-than-expected full-year profit.

Energy shares climbed as Valero reported a 20-fold gain in profit, and Paul Singer’s Elliott Management urged Hess to consider a spinoff of its US shale assets.

EMC and Seagate Technology led technology shares lower amid disappointing outlooks.

Investors in the US were reluctant to make big bets, given mixed US economic data, the run-up in stocks in recent weeks and risk in the form of a slew of economic reports for the rest of the week and the outcome of the Fed Reserve meeting. – (Additional reporting: Bloomberg, Reuters)