Italian stocks shine on flat day in Europe

European shares were little changed yesterday but there were some gains for Italian stocks and banks as investors welcomed a more stable political outlook in Italy and bet the European Central Bank would continue to support euro zone banks.

Italy's FTSE MIB was the best performer, extending gains in late trade to end 1.6 per cent higher after a parliamentary committee recommended Silvio Berlusconi be expelled from the senate following his conviction for tax fraud in August.

The week has been subdued overall, with the Stoxx Europe 600 Index declining 0.7 per cent over the past five days after retreating 0.6 per cent in the previous week amid concern about US budget talks.

DUBLIN
The Iseq index rounded off the week with a 0.4 per cent climb in a day of contrasting fortunes for its biggest stocks. Building materials group CRH gained 0.6 per cent to close at €17.51, while there were also gains for pharmaceutical group Elan, which climbed 1.7 per cent to €11.70, and paper and packaging group Smurfit Kappa, which advanced 0.8 per cent to €17.35.

Food group Glanbia enjoyed one of the highest gains of the day, rising 2.6 per cent to €9.79, while Paddy Power finished up 1.1 per cent at €60.18. Bank of Ireland also rose in tandem with better sentiment towards financial stocks, closing at 22 cent, up 2.75 per cent.

However, Ryanair slipped 0.7 per cent to €6.26, while Aer Lingus also dropped 0.7 per cent to €1.45, despite a positive earnings statement by Deutsche Lufthansa. Meanwhile, a fall of 1.8 per cent for food group Kerryalso cancelled out some of the gains.

LONDON
UK stocks climbed a fraction, led by a rally in Standard Life, as investors sought evidence of progress on the impasse over the US federal budget and debt limit. The FTSE 100 Index gained 0.1 per cent, after earlier dropping as much as 0.3 per cent. Standard Life gained 2.5 per cent to 354.1 pence as JPMorgan Chase reiterated that investors should buy the shares.

Carpetright tumbled 8.5 per cent to 616.5 pence, with chief executive Darren Shapland quitting as the retailer said that lower same-store sales in the UK will cause profit to fall short of its projections.

Tate and Lyle Plc increased 0.8 per cent to 745 pence. Analysts at Investec and Canaccord Genuity Group said the company has forecast a better second half of its financial year. The maker of artificial sweetener Splenda said operating profit for the six months to the end of September probably fell from a year earlier because of weakness in the US beverage market during the cold spring.

EUROPE
The Stoxx Europe 600 Index rose 0.1 per cent to 309.89 at the close of trading, with national benchmark indexes gained in 13 of the 18 western European markets. France's CAC 40 rose 0.9 per cent and Germany's DAX increased 0.3 per cent, with both markets outperforming London.

Banks led gains in Italy, with UniCredit rising 3.4 per cent to €5.23, its highest price since December 2011, and Mediobanca advancing 4.4 per cent to €5.91.

Lindt climbed 3.6 per cent to 44,430 francs after the world's largest premium chocolate maker said it will begin purchasing shares worth about 450 million Swiss francs at the end of this month until the end of 2014, while maintaining its current dividend policy.

US
New York stocks rose, with the Standard and Poor's 500 Index trimming its weekly decline as optimism grew that the lawmakers would reach a deal to end the budget impasse and avoid a default on the federal debt.

Visa climbed 1 per cent to $190.59 and MasterCard added 0.4 per cent to $671.64, after a judge ruled the companies didn't infringe a SmartMetric patent. Facebook gained 3.1 per cent as the operator of the world's most popular social network said it will sell advertising on its Instagram photo service. – (Additional reporting: Bloomberg /Reuters)