Stocks' rise halts two-day decline

EUROPEAN STOCKS climbed, halting a two-day decline, after the Bank of Japan joined the Federal Reserve in opting for further asset purchases to support the economy and housing starts climbed in the US.

Japan’s central bank unexpectedly expanded its asset-purchase target by 10 trillion yen as it seeks to avoid a contraction in the world’s third-largest economy.

The Bank of Japan’s board enlarged the central bank’s easing programme, in which it buys mainly government debt, to Y55 trillion.

In the US, new house building climbed to a 750,000 annual rate in August from a revised 733,000 pace in July.

DUBLIN

AFTER TAKING a brief tumble in the early afternoon, the Irish market finished up half a per cent yesterday, though the biggest stock on the Iseq, building materials group CRH, closed down 0.3 per cent at €15.27.

The index was lifted by a gain of 2.7 per cent for Ryanair, which closed at €4.38.

Bookmaker Paddy Power also had a good day, rising 1 per cent to €1.06, while food groups Glanbia and Kerry both made gains.

Exploration company Petroneft rose 3 per cent after it released a drilling update on its interests in Tomsk Oblast in Russia.

Analysts at Davy Research upgraded their 2013 forecasts for paper and packaging group Smurfit Kappa, which closed more or less flat at €7.60.

However, pharmaceutical group United Drug closed down 1.4 per cent at €2.80, while there was slippage of nearly 1 per cent for drinks group CC, which finished at €3.66.

LONDON

THE UK’s FTSE 100 rose 0.4 per cent, as the unexpected activities of the Japanese central bank dominated the macro-economic newsflow.

It also emerged that Bank of England policymakers voted unanimously to maintain their bond-purchase target, according to the minutes of their September 5th-6th meeting published yesterday.

French Connection slumped 8 per cent to 23 pence after the retailer reported a first-half loss.

HSBC, Europe’s largest bank, gained 1.7 per cent to 587.8 pence. Barclays wrote in a report that it expects HSBC’s underlying earnings to grow 26 per cent in 2013, compared with 4 per cent in 2012.

Sportingbet surged 17 per cent to 51 pence, the largest increase since September 2006.

Bookmaker William Hill said in a statement it plans to acquire Sportingbet’s Australian and “certain other” businesses, while GVC would buy the rest.

No formal offer has been made, William Hill said. Its own stock fell 1.9 per cent to 312.6 pence, the biggest decline since June.

EUROPE

THE BENCHMARK Stoxx 600 climbed to a 15-month high last week after European Central Bank policy makers agreed to implement an unlimited bond-buying program and the Fed unveiled a third round of asset purchases.

Yesterday, national benchmark indexes advanced in 14 of the 18 western European markets. Germany’s Dax added 0.6 per cent and France’s Cac 40 gained 0.5 per cent.

Porsche jumped 7.8 per cent to €46.55 after a German court dismissed two lawsuits that claimed the carmaker lied about its plan to take over Volkswagen in 2008.

In Spain, Zara-owner Inditex added 3.9 per cent to €95.55 after the world’s largest clothing retailer reported better-than-estimated profit.

Hannover Re slipped 1.2 per cent to €50.53, leading a gauge of insurance companies lower.

Heineken gained 6.4 per cent to €45.55 after companies owned by Thai billionaire Charoen Sirivadhanabhakdi gave their support for the Dutch brewer’s $4.6 billion bid for Fraser Neave’s 40 per cent stake in Asia Pacific Breweries.

Holding, Europe’s largest chip-equipment maker, declined 3 per cent to €42.12 after Kyunghyang Shinmun, a South Korean newspaper, reported that Samsung Electronics may cut back on investment in 2013, increasing fears that the chip industry will slow down.

NEW YORK

STOCKS ROSE, snapping a two-day decline in the Standard Poor’s 500 Index, as the Bank of Japan increased its asset-purchase target and sales of existing US homes rose more than forecast.

Bank of America, the second-biggest US lender, gained 1.8 per cent to $9.40 for the biggest advance in the Dow Jones, while Home Depot, the largest US home-improvement retailer, jumped 1.5 per cent to $59.72.

Energy shares sank the most among 10 groups in the SP 500 as crude prices tumbled.

Groupon, the operator of the biggest-daily deals website, rose 7.9 per cent to $5.06 after announcing the launch of a payments service to provide merchants with low fees for credit-card transactions. – (Additional reporting: Bloomberg)