Global gains on good US housing data

STOCKS IN most of the large markets advanced yesterday as data showing the US housing market is stabilising outweighed a report that China has no intention of introducing large-scale stimulus.

DUBLIN

TRADERS DESCRIBED it as a “better day” for equities trading in Dublin yesterday, albeit with most companies working off small volumes.

Resource group Kenmare was the big mover, up 5.35 per cent. “People are more confident that China isn’t closed for business,” said one trader. Elan rose by 3.3 per cent to €11.745 while drinks group CC was up 2.5 per cent at €3.455.

DIY and builders merchanting group Grafton was the big loser, down 4.16 per cent on the day at €2.90. This was in large part down to the knock-on effect of UK rival Wolseley reporting that its third-quarter revenue fell.

EUROPE

CGGVeritas, the world’s largest seismic surveyor of oilfields, increased 5.7 per cent as UBS recommended the shares.

ArcelorMittal gained 4.1 per cent after HSBC Holdings upgraded the steelmaker.

Bankia led a decline in Spanish stocks, sliding 16 per cent. Repsol, the nation’s biggest oil company, sank the most since 2008 after cutting its dividend-payout ratio.

Valeo led a gauge of car-related shares to the biggest gain since March 8th, climbing 5.1 per cent to €35.97. UBS said the French company was one of the few suppliers left offering both upgrades and growth potential.

Preferred shares of Volkswagen, Europe’s largest car-maker, added 4.3 per cent to €134.45, gaining for a third day.

BMW, the biggest maker of luxury vehicles, rose 2.8 per cent to €64. Daimler advanced 2.9 per cent to €38.94 and Renault climbed 4 per cent to €35.12.

“There are expectations that the US economy continues to be an outlier,” said Michael Hewson, a market analyst at CMC Markets in London. “European markets are being pulled up in its slipstream.”

National benchmark indexes rose in all of the 18 western European markets, except Spain and Portugal.

LONDON

UK STOCKS rose for a fourth day. Greggs, a maker of Cornish pasties, jumped the most in 15 years after the UK’s government reversed a plan to tax hot baked food.

Wolseley declined after the seller of plumbing supplies reported that third-quarter revenue fell.

The FTSE 100 has retreated 9.6 per cent from its 2012 high on March 16 as Greece failed to form a government and borrowing costs for Spain surged. The gauge posted its first weekly gain in a month last week as China pledged to support growth.

A sell-off from the start of May left the benchmark at its cheapest valuation since November.

Rio Tinto, the world’s third-biggest mining company, climbed 2.3 per cent to 2,922 pence. BHP Billiton, the largest, rose 2 per cent to 1,751.5 pence.

Greggs rallied 8.1 per cent to 504.5 pence, the biggest advance since March 1997.

The British chancellor George Osborne reversed a plan to make pasties subject to value-added tax, one of the most controversial measures in his March 21st budget. The government had intended to tax the snacks at the same rate as other hot takeaway food.

US

STOCKS rose yesterday, after the first weekly gain since April in the Standard and Poor’s 500 Index, as data signalled that the American housing market has stabilised.

All 10 industries in the SP 500 advanced as commodity and technology companies had the biggest gains. American equities joined a global rally.

Builders DR Horton and PulteGroup increased at least 2 per cent as data showed that home values in 20 US cities declined at a slower pace. Caterpillar, Bank of America and Alcoa climbed more than 2.8 per cent.

Facebook extended losses from the worst-performing large initial public offering during the past decade to 24 per cent.

Coal producers gained after Goldman Sachs Group raised its recommendation for the industry to attractive from neutral. Peabody Energy, the largest US coal producer, jumped 5.6 per cent as Goldman recommended buying the shares. Consol Energy added 1.8 per cent.

Facebook lost 9.6 per cent to $28.84. The company’s options trading began yesterday. Facebook made its debut on May 18th after underwriters sold shares at $38.

Vertex Pharmaceuticals tumbled 11 per cent, the most since 2008. The company revised results reported three weeks ago from a study of two cystic fibrosis drugs, saying the combination showed less of a benefit.

Western Digital slumped 3 per cent, the most in the SP 500. The disk drive maker was downgraded at Barclays. Seagate Technology, also cut at Barclays, fell 4.4 per cent. – (Additional reporting Bloomberg)