Markets move sideways across Europe
It was a subdued end to the week, with markets around the world focused on developments in Washington, where a possible resolution to the US fiscal-cliff budgetary problems was on the agenda.
With markets across Europe moving “sideways”, Dublin was no different yesterday, with the Iseq finishing the day down by 10.46 points or 0.32 per cent at 3,290.27.
After a strong run this week, Bank of Ireland gave up some of its gains to decline by 5.1 per cent to €0.11 on the back of weakness in the European banking sector.
Smurfit Kappa benefited from its entry into the Eurostoxx 600 to bounce during the week, but like other stocks gave up 19 cent or 2.1 per cent to close down at €9.01.
Similarly, after advancing on the back of colder weather this week, energy group DCC fell back yesterday, giving up 30 cent, or 1.3 per cent, to finish down at €23.20.
Building group CRH got a lift when its peer Heidelberg Cement got an upgrade. It added 6 cent, or 0.4 per cent, to climb to €14.05.
In London, the FTSE 100 was little changed, falling by 3.48 points, or less than 0.1 per cent, to 5866.82. The gauge increased for a sixth month – its longest stretch of gains since 2006.
Invensys Plc, the maker of software for London Underground trains, rallied by 41 percent as RBC Capital wrote that the company may be bought after selling its rail unit.
Intertek climbed 1 per cent to 3,090 pence after Berenberg raised its recommendation for the world’s largest consumer-goods testing company to buy from hold and lifted its price estimate for the stock by 23 per cent to 3,340 pence.
Taylor Wimpey and Bellway led house-builders higher, rallying 3 per cent to 61 pence and 1 per cent to 997.5 pence, respectively. UBS upgraded the companies to buy from neutral, saying this years improvement in returns will continue for at least the next three years.
European stocks rose for a second week, posting the longest monthly winning streak since 2006, amid optimism that US lawmakers will reach a budget agreement to avoid the so-called fiscal cliff.
The benchmark Stoxx 600 climbed by 0.9 per cent to 275.78 this week, for a monthly gain of 2 per cent. On the day, France’s CAC 40 Index slid by 0.3 per cent, while German’s DAX was little changed.
“The market was very focused on the political developments in Washington this week,” said Konstantin Giantiroglou, head of investment advisory at Neue Aargauer Bank in Brugg, Switzerland.
“The fiscal-cliff issue will lose some importance going forward. Market participants have to some extent adjusted their expectations concerning the outcome of this political wrangle. An accord will be found at the last minute,” he added.
Swiss food group Nestle rose by 1.4 per cent after it announced a joint-venture to develop intestinal treatments based on Chinese medicines.
US stocks fell as lawmakers negotiated on the federal budget and data showed consumer spending fell in October.
“If you look at the net-net of all the noise surrounding the fiscal cliff, there’s very little impact in terms of meaningful actions,” Douglas Cote, chief market strategist at New York-based ING US Investment Management said, adding: “For the market, it’s creating intraday volatility.”
VeriSign plunged by 14 per cent, the most in the SP 500, after a new contract letting the company manage web sites ending in .com limited price increases.
Yum! Brands Inc lost 9.4 per cent after saying quarterly same-store sales in China will decline.
Zynga and Facebook dropped after loosening terms of their longstanding alliance. – (Additional reporting: Bloomberg/Reuters)