Stocks up on US manufacturing data

UPBEAT MANUFACTURING data from the United States and China helped European shares record their biggest daily gain in three weeks yesterday as leading indexes posted a bullish start to the second quarter.

China’s official purchasing managers’ index hit an 11-month high and the US manufacturing sector grew more than expected in March, allaying concerns that growth in the world’s two largest economies may be slowing.

DUBLIN

THE FIRST day of the new quarter got off to a good start, despite the market embarking on a four-day week. The Iseq index closed up just under 1 per cent higher at 3,286.

Irish Life Permanent provided the main corporate news of the day, despite having minimal significance on the Iseq. ILP’s banking business reported a loss of €424 million for 2011, after it set aside €1.4 billion in loan losses. The share price fell 9 per cent to finish the session at €0.04.

Providence Resources was one of the best performers of the day, adding a further 9 per cent after the company raised $100 million in a share placing, some of which will be used to develop its Barryroe oilfield off the southwest coast of Cork. Providence closed just shy of the €6 mark.

Fellow exploration company Petroneft also made gains, following a positive drilling update this morning. It added 5 per cent to finish the session at €0.117.

Independent News Media lost 2.3 per cent to finish at €0.21, though brokers noted that the volumes were insignificant, with only 20,000 shares traded in Dublin, and 80,000 in London.

Ryanair, which is now in closed period, finished up 0.3 per cent at €4.49, following a share buyback by the company last week.EUROPE

EUROPEAN STOCKS climbed the most in almost three weeks, erasing earlier losses, as reports showed manufacturing expanded more than forecast in the US and China.

Oriflame Cosmetics gained 2.6 per cent after Coty offered to buy Avon Products for $10 billion.

Cookson Group jumped 6.6 per cent following reports that the company may spin off a unit.

The benchmark Stoxx Europe 600 Index advanced 1.4 per cent by close in London, having earlier dropped as much as 0.4 per cent. The gauge climbed 7.7 per cent in the first quarter, its best start to a year since 2006, boosted by the European Central Bank’s €1 trillion in loans to the region’s financial firms.

National benchmark indexes advanced in 12 out of 18 western-European markets. France’s CAC 40 Index climbed 1.1 per cent, the UK’s FTSE 100 Index rose 1.8 per cent while Germany’s DAX Index rallied 1.5 per cent.

LONDON

UK STOCKS climbed for a second day. Rio Tinto, the third-biggest mining company, advanced 2.8 per cent and Fresnillo gained 2.9 per cent as base metals increased. Cookson Group rose 4.9 per cent after a report that it plans to spin off its electronics unit.

Lloyds Banking Group and Barclays fell at least 1 per cent. The FTSE gained 3.5 per cent in the first quarter.

ARM Holdings gained 2.6 per cent to 607.5 pence following weekend reports that Vodafone Group’s deputy chairman, John Buchanan, will resign from the mobile-phone operator to become chairman of ARM, which designs chips for Apple iPhones.

US

THE US markets were broadly unchanged during trading yesterday, on the back of strong manufacturing figures. US stock markets closed their strongest quarter in more than two years on a positive note on Friday, led by underperforming sectors like energy and healthcare. This week the US is focused on payroll figures which will be released on Friday.

Coty offered to buy cosmetics direct seller Avon for $23.25 a share, a 20 per cent premium over last Friday’s closing price. Avon jumped 15.2 per cent to $22.30.

Groupon sank 12 per cent after the company said fourth-quarter sales were lower than previously stated. Amazon.comfell 2.3 per cent as the largest internet retailer was cut at Bank of America.

Commodity shares rose the most among 10 groups in the S P 500. Freeport-McMoRan jumped 1.8 per cent to $38.73. Alpha Natural, a coal producer, surged 3.5 per cent to $15.74.

Oil rose from a six-week low on the back of the US manufacturing figures which signalled economic growth in the worlds biggest crude-consuming country.

Crude oil for May delivery rose $1.38, or 1.3 per cent, to $104.40 a barrel at 12:07pm on the New York Mercantile Exchange. The US was responsible for 21 per cent of global oil demand in 2010, according to BP’s Statistical Review of World Energy. The euro zone economy accounted for about 12 per cent of world use.

Oil reached $110.55 on March 1st, the highest level since last May, amid speculation that Western sanctions aimed at halting Iran’s nuclear program will disrupt Middle East shipments. – Additional Reporting: Reuters/Bloomberg