Trading subdued on most markets

FINANCIAL MARKETS had a quiet day as investors await the next steps in the will-they-or-won’t-they saga concerning Spain and a request for a bailout following a local election victory for Madrid’s prime minister Mariano Rajoy.

Most European markets posted slight losses yesterday as investors adopted a wait-and-see approach on the next steps facing Spain and speculated that the election result may delay a bailout request.

DUBLIN

IRISH SHARES lost less than 0.1 per cent of their value, outperforming European markets but trading was described as subdued.

“The absence of any major news out of Europe or the US meant that everything really just sat still,” said one Dublin stockbroker.

Dragon Oil traded almost 2 per cent weaker, declining 11.5 cent to €6.85 a share ahead of an interim management statement from the company tomorrow.

Irish exploration group, Petroneft, closed up 12.5 per cent or one cent to close at 48 cent a share, making it the biggest mover on the day. The company traded up 15 per cent to 6.88 pence sterling in London where more than 26 million shares changed hands. Overall, more than one fifth of its issued shares were traded.

Petroneft reported that the second production well in its Arubzovskoye field in Siberia has been completed and produced flow rates of 540 barrels of oil per day initially, which was well ahead of target. The first produced over 300 barrels per day, and the company plans to drill 10 such production wells in the field.

The addition of the second Arubzovskoye well brings the company’s gross production to 2,700 barrels a-day.

Shares in drinks company CC closed up almost 1 per cent or nearly four cent at €3.77 ahead of the company’s half-year results today for the financial six-month period to September when investors will be watching for sales during the summer and whether cider sales are being sold in any greater volumes overseas.

The big shares on the Irish exchange were little changed with Ryanair and packaging company Smurfit Kappa falling slightly.

Bank of Ireland rose 2 per cent to close at 9.6 cent but again on light volumes.

LONDON

UK STOCKS declined for a second day as Japan’s exports tumbled and US companies reported sales that trailed forecasts.

Aggreko slid 3 per cent after UK bank HSBC cut its rating on the stock. Fresnillo and Randgold Resources led basic-resources shares higher. The FTSE 100 fell 0.2 per cent.

Japan’s exports slid 10.3 per cent, worse than analysts had expected, in September from a year earlier. The drop was the most since May 2011, two months after the earthquake struck Japan’s northeast, triggering a tsunami and a nuclear disaster.

Of the six companies in the Standard and Poors 500 Index to report results today, four had revenue that missed analysts’ estimates, including Caterpillar.

EUROPE

MARKETS IN Europe fell in line with the UK, declining for a second day on Japan’s falling export figures and investors pondered whether that victory for Rajoy in the local elections eased pressure on him to seek a bailout.

The Spanish prime minster’s party extended its majority in the stronghold region of Galicia, winning 41 of the 75 seats in the regional assembly. Yields or interest rates on Spanish bonds rose. The country’s 10-year bond rose 11 basis points, or 0.11 percentage point, to 5.48 per cent, the biggest increase since last week.

The Stoxx Europe 600 Index slipped 0.4 per cent at the close, having earlier risen as much as 0.3 per cent. France’s CAC 40 lost 0.6 per cent, while Germany’s DAX dropped 0.7 per cent.

Veolia Environnement fell 5 per cent after denying that it was working on a merger with Suez Environnement. Nexans slid 6.6 per cent after cutting its forecasts.

Royal Philips Electronics climbed the most in more than a year after the world’s largest lighting company reported profit that beat estimates.

Scania advanced 3.2 per cent as the truckmaker’s orders declined at a slower pace.

US

STOCKS IN the US fell, sending the Standard and Poor’s 500 Index toward its biggest three-day decline since July, as investors watched corporate results.

Freeport-McMoRan Copper and Gold, the world’s biggest publicly traded copper producer, and SunTrust Banks, retreated at least 2.2 per cent after their earnings missed estimates from analysts. Peabody Energy, the largest US coal producer by volume, rose 11 per cent after earnings exceeded analysts’ projections.

The S&P 500 fell 0.5 per cent at lunchtime in trading in New York while the Dow Jones Industrial Average fell 0.5 per cent.

Technology shares had the only gain in the index among 10 industries, adding 0.2 per cent. Apple jumped 2.5 per cent. The shares had slumped 6.2 per cent over the previous three days. (Additional reporting - Bloomberg, Reuters)