European stocks boosted by insurers

FTSE 100 slips, trimming its weekly gains

CRH rose 2.2% to €16.45. Photograph: Brenda Fitzsimons.

CRH rose 2.2% to €16.45. Photograph: Brenda Fitzsimons.

Sat, Aug 3, 2013, 01:00

European stocks advanced for a fifth day, extending a nine-week high as company earnings beat estimates and investors studied US jobs data for indications of when the Federal Reserve will start to pare back economic stimulus. The earnings boost came from Paris-listed insurer Axa and Frankfurt-listed Allianz, however. In London, the FTSE 100 failed to join in the gains elsewhere.

The Iseq index increased 0.75 per cent, extending its highest level since 2008, as its largest stock, CRH, rose 2.2 per cent to €16.45 on the back of promising construction data in the UK where the sector’s growth rate is at a three-year high.

Bank of Ireland fell half a per cent to 18 cent on a day in which it posted first-half figures that showed a rebound in margins and prompted analysts to suggest they intended to upgrade their full-year estimates.

Ryanair climbed 1.6 per cent to €7.27, after IAG reported a second-quarter operating profit that was ahead of analysts’ projections. However, Aer Lingus fell 2 per cent to €1.66.

UK stocks fell for the first time in five days, trimming the benchmark FTSE 100 index’s weekly advance, after a report showed US employers added fewer jobs in July than forecast. The blue-chip FTSE 100 index fell 0.5 per cent at the close in London, having enjoyed better fortunes earlier in the day as a report showed an acceleration in UK construction growth.

RBS sank 3.3 per cent to 322.5p. Britain’s biggest publicly owned lender said Ross McEwan will replace Stephen Hester as chief executive on October 1st. First-half net income was £535 million, compared with a £2 billion loss a year earlier.

William Hill fell 7.3 per cent, the most since August 2009, to 458.5p. The operator of more than 2,300 betting shops said first-half pretax profit was £143.6 million, trailing the average analyst estimate of £152.3 million. Smiths Group tumbled 5.5 per cent to 1,320p. The producer of security scanners said talks with a potential buyer for the sale of its medical division have ended after failing to conclude terms.

IAG jumped 6.7 per cent to 317p, the highest since February 2008. Profit before one-time items was €245 million in the second quarter, compared with a €4 million loss in the year-earlier period.

Man Group advanced 9.5 per cent, the most in three months, to 91.5p. The world’s biggest publicly traded hedge-fund manager posted first-half earnings that surpassed analysts’ estimates, helped by higher performance fees at its GLG Partners unit.

National benchmark indexes rose in 12 of the 18 western European markets. Germany’s Dax and France’s Cac 40 were little changed, while the Swiss market rallied 1.8 per cent as markets in Zurich reopened after Thursday’s holiday.

Of the nine Stoxx 500 companies that reported earnings today, five beat profit forecasts, while seven exceeded projections for sales, according to data compiled by Bloomberg.

Axa climbed 2.2 per cent to €17.13, its highest price since April 2010. Europe’s second-largest insurer posted first- half operating income of €2.58 billion, above the €2.38 billion average forecast. Allianz advanced 0.8 per cent to €119.85. Europe’s largest insurer said second-quarter net income rose 27 per cent to €1.59 billion from a year earlier.

Deutsche Lufthansa slid 5 per cent to €14.67, a three-month low. First-half operating profit fell 69 per cent to €72 million, missing the analyst estimates of €139 million.

Stocks in New York were little changed. Chevron slipped 2.3 per cent after posting its biggest second-quarter profit decline in four years. Dell advanced 5.3 per cent as Michael Dell agreed to sweeten his proposal to buy the computer maker with a special dividend. – (Additional reporting: Bloomberg.)