Positive signs boost hopes of investors

Eurostoxx 50:2,259.41 (+2.56%) Frankfurt DAX:5,847.03 (+3.11%) Paris CAC:3,055.39 (+2.73%)

POSITIVE ECONOMIC indicators from many of the main economies in the western world helped to firm up prices on most of the leading stock markets yesterday.

Good figures on US housing starts, a strong reading of the German Ifo index, gains in consumer confidence in the UK, and a solid Spanish debt auction boosted investor hopes about the global economic outlook.

DUBLIN

The Iseq rose by 1.8 per cent as the positive economic indicators from around the main economies fed through.

Medical services group Icon was the main mover, rising by 8.5 per cent to just over €12.20.

It was followed by Athlone-based pharma group Elan, which has been on a good run of late. Elan rose by 3.4 per cent to €9.76.

United Drug was up 2.8 per cent at €2.01, while Swiss/Irish food group Arytza rose by 2.7 per cent to €36.30.

Most stocks finished in positive territory. Only a small number declined, led by food company Greencore. The company revealed plans to move its listing to London, and appears to have had a change of heart on holding a secondary listing in Dublin, having previously indicated that it would so so. Greencore shares closed the day down 5.3 per cent at 62.5 cent.

Irish Continental Group finished 2.7 per cent lower at €14.304.

There was no festive cheer in yesterday’s session for drinks group CC, which was 0.7 per cent lower at €2.765.

LONDON

UK stocks advanced after better-than-estimated data on housing starts in the US and as reports showed gains in British consumer confidence. Rio Tinto Group contributed the most to an increase in commodity companies as metals prices climbed.

Aggreko, the world’s largest provider of mobile power supplies, rose 6.6 per cent to 1,970 pence as Citigroup recommended the shares, citing “impressive local business momentum”.

“Are we finally hearing the jingling sleigh bells of the much-hoped for Santa rally?” Chris Beauchamp, a market analyst at IG Markets in London, wrote in an email.

In the UK consumer confidence rose in November from a record low as Britons’ expectations for the economy improved in the run-up to Christmas, Nationwide Building Society said.

Rio Tinto added 2.3 per cent to 3,096 pence. Kazakhmys climbed 4.2 per cent to 886.5 pence. Randgold Resources increased 3.2 per cent to 6,700 pence.

Gold, copper and nickel all rallied in London.

AstraZeneca slid 1.5 per cent to 2,905 pence, its biggest drop since November 21th, as the drugmaker said core earnings per share for the year would probably be “in the lower half” of its $7.20 to $7.40 forecast.

The company will take a charge of $381.5 million in the fourth quarter after two experimental medicines had disappointing results.

EUROPE

European shares rose in thin trade after a jump in US housing starts, a strong reading of the German Ifo index and a solid Spanish debt auction boosted investor hopes.

The cyclical car-making sector, which performance is dependent on strong economic growth, was the top performer, with the STOXX Europe 600 Automobiles and Parts index up 5 per cent on the improved growth outlook.

“Markets are taking a favourable view of the economic data as this could mean the outlook for company earnings is not so bad,” said Mike Lenhoff, chief strategist at Brewin Dolphin.

“The Spanish auction was helpful and the fall in bond yields has translated into investors buying riskier assets. But who knows what is going to happen next. We are not going to change our defensive stance in our portfolios.”

The FTSEurofirst 300 index of top European shares provisionally closed up 1.9 per cent at 975.27 points, but volume was low at 63.1 per cent of its 90-day daily average.

NEW YORK

US stocks rebounded sharply in early trading yesterday as investors latched on to signs of easing stress in Europe’s bond markets as well as some positive economic data at home and abroad.

US housing starts and permits for future construction surged to a 1½-year high in November as demand for rental apartments rose.

The Dow Jones Home Construction Index jumped 5 per cent, led by Pultegroup, the second largest US homebuilder, up 8.5 per cent to $6.07, and MDC Holding, up 6.5 per cent to $17.22.

“We have been expecting a rally for a couple of days now and finally we got it,” said King Lip,chief investment officer at Baker Avenue Asset Management in San Francisco.

Major indexes were well over 2 per cent higher in moderate early trading volume. Some of the strongest gains came in cyclical areas of the market, such as financials and commodity-related stocks. – (Additional reporting by Bloomberg and Reuters)