Europe rallies as German ruling due

EUROPEAN STOCK markets rallied towards the end of the session yesterday as Germany’s top constitutional court said it would proceed with a ruling on the country’s role in the euro zone bailout fund and speculation grew that the Federal Reserve would boost stimulus.

The euro also hit a four-month high against the dollar amid widespread optimism that the German court would approve the ESM or euro zone bailout fund.

IRELAND

THE ISEQ index underperformed in comparison with its European peers, losing close to 1 per cent.

Bank of Ireland gained 3 per cent to €0.098, after it announced that institutional shareholder Harris Associates increased its stake in the bank to more than 7 per cent last Friday.

CRH was actively traded. The construction stock, which has a secondary listing in Dublin, slid more than 2 per cent during the session after Bank of America recommended investors sell the stock. However, it regained ground to finish the session flat at €15.10.

Paddy Power fell by 2.8 per cent to €56.23 after peer company Betfair said that the Olympics had affected on its soccer and horse-racing betting business, resulting in slower revenue growth in August.

Kingspan finished fractionally higher at €7.98 after the company announced the completion of its acquisition of ThyssenKrupp Construction Group and Rigidal Industries which had been announced in August.

UK

UK STOCKS erased losses in the final half an hour of trading, led by a rally in banks. Royal Bank of Scotland and Barclays both advanced more than 2 per cent in London trading.

Burberry plummeted 20 per cent to 1,101 pence yesterday afternoon, the largest decline since its initial public offering in July 2002. Britain’s biggest maker of luxury goods said adjusted pretax profit in the year through March will be at the lower end of analyst estimates, which range from £407 million (€508.7million) to £454 million (€567.45 million).

Vedanta Resources and Antofagasta, producers of copper listed in London, retreated 2.5 per cent to 977.5 pence and 2.2 per cent to 1,222 pence, respectively.

Tullow fell 2.1 per cent to 1,357 pence in London, the stock’s biggest one-day decline since August 2nd, as the company said it would plug a Kenyan exploration well in which it was involved in Apache, after failing to find commercial quantities of crude or natural gas.

EUROPE

GERMAN STOCKS climbed to a 13-month high amid mounting optimism that the top constitutional court will rule today in favour of its participation in the European Stability Mechanism.