Italian poll result rattles global values

Wed, Feb 27, 2013, 00:00

Uncertainty generated by Italy’s elections rattled global stock indexes and European bond markets for a second day yesterday, though testimony by Federal Reserve chairman Ben Bernanke helped limit losses in US stocks.

The Irish market meanwhile outperformed its peers and was one of the few European markers to end on a positive note following strong results from index heavyweight CRH.

DUBLIN

There were “volatile swings” across the Irish stock exchange yesterday, with political headlines from Europe driving the market according to one stockbroker.

Overall, the Iseq index of Irish shares gained 24 points or 0.6 per cent to close at 3,732.79, better than the DAX, FTSE and CAC which all retreated.

CRH was the biggest performer of the day finishing the day up 2.8 per cent at €16.67 following “a solid set of results”. The construction group reported better than expected earnings for 2012, with Ebitda of €1.6 billion coming in 2 per cent ahead of forecasts.

Kerry also finished the day on a positive note after reporting double-digit growth for 2012. The food and ingredients company rose 2.9 per cent to close at €42.40.

Kingspan stock declined, falling 1.4 per cent to €8.59, while Irish Continental Group also lost out, retreating 2.2 per cent to €20.05.

LONDON

UK stocks dropped to the lowest level in more than two weeks, led by a sell-off in financial companies, as Italy’s election stalemate reignited concern that the euro area’s debt crisis will worsen.

HSBC, Europe’s largest bank by market value, and Barclays both lost more than 2 per cent as Italian bond yields climbed the most in 14 months. Schroders, Europe’s largest publicly traded money manager, fell 3.1 per cent.

Provident Financial fell 3.7 per cent to 1,468 pence. The subprime lender reported a 12 per cent increase in full-year pre-tax profit to £181.1 million.

The FTSE 100 Index sank 84.93 points, or 1.34 per cent, to 6,270.44 at the close in London, its lowest level since February 8th.

EUROPE

European stocks declined as Italy’s inconclusive parliamentary election renewed concern that the Mediterranean nation will dilute its austerity programme and the region’s sovereign-debt crisis will deepen.

Italian shares led the retreat, with the FTSE MIB Index tumbling 4.9 per cent. Telecom Italia slumped to a 15-year low as contracts to protect against a default by the country’s biggest phone company surged.

SEB slid the most in four months after full-year net income missed estimates.

The Stoxx Europe 600 Index fell 1.3 per cent to 284.60 at the close of trading, the biggest loss since February 21st. More than seven shares on the gauge dropped for every one that climbed.

Germany’s DAX retreated 2.3 per cent, while France’s CAC 40 slipped back 2.7 per cent.

US

Stocks mostly rose after Federal Reserve chairman Ben Bernanke defended the Fed’s bond-buying stimulus before Congress, but warned forced spending cuts that could be triggered this week represented a headwind for the economy.

Gains in homebuilders and other consumer stocks, following strong economic data, kept the SP 500 nearly unchanged, while a 5 per cent jump in Home Depot lifted the Dow industrials.

Stocks hit session highs after Mr Bernanke, in testimony before the Senate Banking Committee, defended the Fed’s bond-buying stimulus agenda that has been essential for the stock market’s recovery.

AMC Networks was the Nasdaq’s biggest percentage decliner reporting a quarterly profit way below analysts estimates. Its stock fell 7.4 per cent to $53.77. – (Additional reporting: Bloomberg, Reuters)