Investors wait for result of US election
Global markets remained steady or rose slightly, led by a rally in financial stocks, as investors awaited the results of the US preisdential election.
The US dollar weakened against most main currencies, while uncertainty over Greece’s next bailout payment kept the euro at a two-month low.
The Iseq index of Irish shares rose just 0.4 per cent, although stocks performed better late on as investors awaited the election result in the US to see if Barack Obama would be unseated.
Trading was again light, with one Dublin trader saying that “volumes have been patchy for as long as I can remember at this stage”.
The trader said investors had priced in Mr Obama winning in the US election as his victory would give the markets certainty, although a Mitt Romney victory would mean more decisive action in tackling the “fiscal cliff” of upcoming tax cuts and spending increases.
Building materials and DIY group Grafton was the strongest performer of the main stocks on the day, climbing 5 per cent to €3.55.
A trading update from the company showed the company to be performing well in the UK, while its Irish business was not doing as badly as though and was improving.
Aer Lingus rose 2.3 per cent to €1.11 a share as new figures from the airline showed a 10 per cent jump in long-haul passengers and investors awaited a trading update from the airline today.
Rival Ryanair increased 1.4 per cent to €4.89 a share, holding on to strong gains in Monday’s trading.
Building materials giant CRH, the largest stock on the market, was an underperformer, remaining flat at just over €15.00 a share.
Distribution specialist DCC outperformed the market, gaining 1.6 per cent to €23.65 a share after reporting interim results which showed a rise in operating profits.
UK stocks advanced for the third time in four days, led by a rally in financial companies. The FTSE 100 Index added 0.8 per cent.
Resolution jumped 7 per cent as analysts at Bank of America upgraded the insurance-buyout firm. A gauge of insurance companies climbed 1.7 per cent.
ARM Holdings gained 2.1 per cent after Apple was said to be exploring how to use chip designs from its iPad and iPhone in Mac computers. Marks Spencer rose 2.8 per cent after reporting earnings.
“Stock markets are higher in Europe, but there is an element of caution ahead of the presidential election,” said James Hughes, chief market analyst at Alpari in London.
European stocks also climbed for the third time in four days as France’s CAC gained 0.9 per cent and Germany’s DAX rose 0.7 per cent. Volkswagen dropped 4.1 per cent as the carmaker sold €2.5 billion of bonds that convert into shares. The Stoxx Europe 600 Index increased 0.6 per cent as more than two shares rose for every one that declined.
“Europeans would like to see Barack Obama elected because they know where he stands,” said Robert Halver, analyst at Baader Bank in Frankfurt. “Whichever president is elected will have to face the fiscal-cliff debate.”
The so-called fiscal cliff refers to the $607 billion in federal spending cuts and tax increases scheduled to take effect in January unless the US Congress can reach a compromise.
American stocks and commodities rallied for a second day, while the dollar and Treasuries fell. The SP 500 index increased 0.8 per cent.
Commodity, industrial and financial shares led an advance in all 10 of the main industries in the SP index.
Healthcare equipment and service companies had the only retreat among 24 groups. – (Additional reporting - wires)