Stocks rise on Schäuble's comments

Tue, Aug 28, 2012, 01:00

EUROPEAN STOCKS rose and the euro traded near a seven-week high against the dollar after German business confidence fell less than some economists had forecast, and German finance minister Wolfgang Schäuble said Germany and France would create a working group to enhance the region’s fiscal and monetary union.

However, a bank holiday in Britain had a knock-on effect, with markets quiet across the board.

DUBLIN

WITH THE FTSE closed in London, the Iseq had a very quiet start to the week, with little stock traded in Dublin. The Iseq ended the session relatively flat at around 3.164.

According to one analyst, some companies that reported interims earlier in the month had delayed investor roadshows until investors were back at their desks in September, further subduing activity.

Attention is expected to focus today on a number of names which report half-year results this week.

Glanbia, which publishes results tomorrow, is also expected to update the market on its plans for the hiving-off of its liquid milk business.

The stock closed up just over a half of 1 per cent at €5.95.

Paddy Power, which also reports tomorrow, saw a similar gain, rising just under 0.5 per cent to close at €52.81.

However, Grafton Group stayed in negative territory throughout the session ahead of its interim figures, closing off 1 per cent at €3.17.

As board reconfiguration continued yesterday at Independent News Media, which resulted in Denis O’Brien ally Leslie Buckley being appointed to the board, INM added 2 cent to €0.20 yesterday.

EUROPE

EUROPEAN STOCKS rose on Schäuble’s comments. National benchmark indexes gained in every western European market that opened yesterday.

Frances Cac-40 rose 0.8 per cent while Spain’s Ibex 35 increased 0.9 per cent.

Germany’s Dax Index climbed 1.1 per cent after a report showed business confidence fell less than some economists forecast.

Financial stocks rose, with Deutsche Bank and BNP Paribas both gaining at least 2 per cent.

Nokia surged 7.7 per cent to €2.69, the biggest advance on the Stoxx 600, amid speculation the companys sales will benefit if the US bans some of Samsungs mobile devices.

Samsung plummeted in Asian trading after a US court ruled that the world’s biggest handset maker infringed six of seven Apple patents.

Q-Cells surged 11 per cent after South Korea’s Hanwha Group signed a deal to acquire the insolvent German company.

Lundin Petroleum climbed 4.4 per cent to 153.60 kronor after the Swedish oil company said it discovered a 25-meter oil column at an appraisal well in the north-eastern part of Johan Sverdrup deposit, Norway’s largest oil find since 1974.

On the European bond markets, Spanish 10-year bonds rose amid speculation that European leaders are making progress on containing the debt crisis, while German 10-year bonds halted a three- day advance.

Spanish 10-year bonds rose for the first in four days, with the yield falling four basis points to 6.38 per cent.

The extra yield, or spread, that investors demand to hold the securities instead of German bunds shrank four basis points to 503 basis points.

NEW YORK

US STOCKS fluctuated, while treasuries rose, as investors awaited a speech later in the week from Federal Reserve chairman Ben Bernanke to gauge prospects for monetary policy.

Apple surged in the first full day trading since a US jury found that Samsung had infringed on six of its mobile-device patents.

Earlier, Samsung tumbled almost 7.5 per cent in South Korea, its biggest drop since 2008.

Google, which offers the Android mobile software, declined 1.2 per cent by lunchtime.

Best Buy jumped 6.4 per cent on an agreement that will allow founder Richard Schulze to conduct due diligence in his effort to acquire the world’s largest electronics retailer.

Dollar Thrifty Automotive Group rallied 7.4 per cent in morning trade to $87 after Hertz struck a deal to buy the company for about $2.6 billion in cash. Hertz jumped 11 per cent to $14.64.

Meanwhile, Gasoline futures jumped 2.4 per cent as a tropical storm in the Gulf of Mexico threatened production.

Gasoline advanced as much as 4.1 per cent on the New York Mercantile Exchange and natural gas as much as 2.4 per cent.

– (Additional Reporting: Reuters/Bloomberg)