Positive data counters Greece concerns

ECONOMIC DATA from Germany and the US provided a counterweight to ongoing concerns about Greece and the euro. German GDP figures released yesterday showed its economy grew by an impressive 0.5 per cent in the first quarter of this year.

In the US, the National Association of Home Builders released a report showing a significant improvement in homebuilder confidence in May.

DUBLIN

THE Iseq index closed down a mere 0.12 per cent, which compared reasonably with other European measures.

DCC released figures showing profits fell last year as mild weather and higher oil prices affected its energy subsidiary. Although revenues rose to €10.7 billion, up almost 25 per cent on a constant currency basis, operating profit fell by 18.3 per cent to €185 million. DCC closed unchanged, at €19.90.

Glanbia has announced that it is cutting milk prices to suppliers, the first such cut in 2½ years. The stock was unchanged, at €5.80.

The largest sale of the day involved an institutional shareholder selling 2.6 million shares in the Bank of Ireland to another institutional shareholder, traders said.

They also noted Moody’s downgrading of some Irish mortgage-backed securities totalling €2.6 billion and its placing even more on notice for review.

However the rating agency’s negative views on Irish mortgage debt did not prevent Bank of Ireland shares from closing up 2.27 per cent, at €0.09.

Ryanair releases results next week. It closed at €4.37, up 0.57 per cent. Aer Lingus closed at €0.98, a rise of 0.61 per cent.

LONDON

LONDON’S leading shares index reversed earlier gains which had been driven by a surprise 0.5 per cent growth in Germany’s first quarter GDP, which kept the euro zone out of recession by the slimmest of margins.

The pound was slightly up against the euro at a three-year high of £1.25.

Heavily weighted miners and financial stocks remained unsettled with Vedanta Resources down 40 pence to 1013p, Royal Bank of Scotland off 0.5p at 21.3p and Barclays 3.7p lower at 186.1p.

Insurer Aviva, which will publish an update later this week, was down nearly 3 per cent, to 282.4p.

Security services group G4S was among the biggest risers after it reported first quarter revenues growth of 7.5 per cent, helped by its contract to provide thousands of staff for this summer’s London Olympics. Shares were 8.4p higher at 275.2p as G4S also said that profits for the period were in line with a year earlier.

Thomas Cook’s warning that it is in danger of collapse if shareholders fail to back two planned disposals wiped 11 per cent from its share price.

The tour operator posted documents to shareholders over the weekend in which it explained the financial importance of the planned sale and leaseback of part of its aircraft fleet and the disposal of five Spanish hotels.

Shares fell 2.3p to 19p.

EUROPE

NATIONAL indexes fell in almost every western European market, with Greece’s ASE falling 3.6 per cent to its lowest level since November 1992.

UniCredit and Intesa Sanpaolo, the biggest Italian lenders, declined 5.5 per cent to €2.53 and 5.5 per cent to €97.65 respectively, after Moody’s cut the credit ratings of 26 of Italy’s lenders, citing weakened earnings and the domestic economic outlook.

Julius Baer slumped 6.1 per cent to 32.11 Swiss francs after the Swiss wealth manager reported that its gross margin was “slightly below” 100 basis points over the period, compared with 105 basis points in 2011.

US

US STOCKS fell yesterday for the eighth day in the past 10 as uncertainty stemming from the political stalemate in Greece gave investors another reason to be cautious and sellers came out in force late in the session. The SP 500 fell for the third straight session

After holding near the unchanged mark for much of the session, stocks moved lower in the absence of positive news to turn the tide of negative sentiment.

Quarterly results helped boost retailers TJX, up 6.9 per cent at $42.45, and Dick’s Sporting Goods, up 5.9 per cent at $50.05.

Home Depot shares lost 2.4 per cent to $48.67 after the home improvement retailer posted quarterly sales that fell short of Wall Street’s expectations.

JPMorgan Chase rose 1.3 per cent to $36.24, mostly unchanged this week after falling more than 11 per cent last week after disclosing a trading loss of at least $2 billion.

Chesapeake Energy shares fell as much as 7.8 per cent to $14.31 after a credit rating downgrade and news that the natural gas producer will increase its borrowing to $4 billion from the planned $3 billion. Chesapeake finished down 5.6 per cent at $14.65.

Indications of high demand for Facebook’s IPO prompted some buyers to snap up other social media companies’ shares, such as online game maker Zynga, up 7.7 per cent at $8.56. – (Bloomberg)