European values continue advance

Wed, Oct 31, 2012, 00:00

AS SUPERSTORM Sandy roared on, closing markets for a second day in New York, European markets stormed ahead with a key European equity index reaching its highest level in more than a week.

Strong corporate earnings boosted the market, although volumes were still weak as traders approached the last day of the month and the US market remained closed.

DUBLIN

THE ISEQ index of Irish shares gained 0.91 per cent, in line with the market generally, though volumes were low.

Food related stocks were among the best performers.

Kerry Group saw strong volumes early on in the session, though it finished only marginally higher at €41.45, up 0.2 per cent. The food ingredients company will publish an interim management statement today.

There were some buyers around in Glanbia, which is preparing for a series of shareholder votes next month on the company’s proposed joint venture deal with Glanbia co-op. The stock closed up a half a per cent at €7.60.

CC was strongly traded, trading around the €3.76 mark for much of the session, though it finished down slightly lower at €3.74.

Ryanair finished the session up 0.4 per cent at €4.50. As one trader noted, the company is entering an important month, during which it will update the market on its important quarter two performance. A special dividend of 34 cent is also due to be paid during the month.

Kenmare Resources bounced back, advancing 3 per cent to €0.49.

LONDON

UK STOCKS advanced the most in two weeks as BP reported earnings that exceeded analysts’ estimates and mining companies rebounded with metal prices.

The FTSE 100 Index added 54.8 points, or almost 1 per cent, to 5,849.9 at the close in London, its biggest rally since October 16th.

BP jumped 4.2 per cent after Europes second-largest oil company also increased its dividend payout.

Rio Tinto Group rose 2 per cent as copper climbed from an eight-week low. BHP Billiton gained 1.8 per cent after announcing a plan to expand its Australian iron-ore operations.

Vedanta Resources also gained 2 per cent to 1,150 pence, while Xstrata rose 1.4 per cent to 981.8 pence.

Barclays gained 3.4 per cent to 238.8 pence ahead of earnings figures today. Britains second-biggest bank may say pretax profit rose 25 per cent to £1.67 billion in the third quarter, according to analysts’ estimate, as revenue from the fixed-income arm of its securities unit jumped.

The results will be the first for Antony Jenkins, who took over as chief executive in August after Barclays was fined a record £290 million for manipulating Libor.

Quintain Estates and Development climbed 1.9 per cent to 54 pence. The company’s biggest shareholder, Laxey Partners, is believed to have sold a 10 per cent stake in the British property developer.

EUROPE

EUROPEAN STOCKS rose the most in two weeks as companies from BP to Deutsche Bank AG reported earnings that topped estimates and US house prices climbed.

National benchmark indexes advanced in 15 of the 18 western-European markets. Germanys DAX climbed more than 1.1 per cent, while Frances CAC 40 rallied just over 1.5 per cent.

Deutsche Bank added 4.5 per cent to €34.80. The lender said third-quarter profit rose 3 per cent after investment-banking revenue exceeded targets.

Net income climbed to €747 million in the three months through September from €725 million a year earlier, said the company.

UBS climbed 5.9 per cent to 13.89 Swiss francs, its highest price since July 25th, 2011.

The bank said it plans to save about 3.4 billion francs in additional annual costs by the end of 2015 as it reduces staff numbers by 10,000, to about 54,000.

The company will target a return on equity of at least 15 per cent starting in 2015, compared with a previous goal of 12 per cent to 17 per cent.

Erste Group Bank AG advanced 6.3 per cent to €19.07 in Vienna. Europe’s third-biggest lender said net income rose to €143.7 million in the three months through September, after a €1.5 billion loss a year earlier.

Eni SpA added 2.1 per cent to €17.69 as Italy’s largest oil producer reported third-quarter adjusted net income from continuing operations of €1.78 billion.

Meanwhile, oil rose from the lowest level in almost four months in New York on speculation that demand will soon rebound after Atlantic superstorm Sandy made landfall on the US east Coast. Futures climbed as much as 0.8 per cent after the storm came ashore in southern New Jersey on Monday evening.

Crude oil for December delivery rose 44 cents, or 0.5 per cent, to $85.98 a barrel at 12:03pm on the New York Mercantile Exchange. – (Additional Reporting: Bloomberg)