Positive jobs news in US lifts markets

Eurostoxx 50:2,547.15 (+2.33%) Paris CAC:3,492.46 (+0.49%) Frankfurt DAX:7,363.85 (+0.38%)

EQUITY MARKETS in Europe flirted with two-week highs yesterday after a report revealed that US companies took on more employees than forecast last month.

The US labour department report showed that a net 171,000 workers were added to payrolls, adding to a 148,000 gain in September. This proved welcome news for investors as well as for US president Barack Obama’s election campaign.

The publication gave markets a lift, although enthusiasm waned at the close of trading and some analysts forecast a more conservative approach to the markets at the start of the next week as the final stages of the US election play out.

DUBLIN

INVESTORS’ ATTENTION was focused on Ryanair ahead of the release of its interim results on Monday, with dealers reporting a substantial and “lively” two-way flow in trading, with eight million shares changing hands on the Dublin and London markets.

It closed up almost half a per cent at €4.55, having traded higher earlier in the session.

Overall, the Iseq enjoyed a positive day, finishing up 1 per cent – a gain that outperformed the major European indices.

Cement-maker CRH, the biggest stock on the index, attracted buyers amid generally good sentiment in the building materials sector, closing up 1.75 per cent at €14.90. Bank of Ireland also had a good day, finishing up 3 per cent at 10 cents, while drinks company CC joined in the mood, closing at €3.80, up 2.2 per cent.

Food group Kerry was the only notable stock to come under slight pressure. It closed down 1.6 per cent at €39.65 as sellers buoyed by positive sentiment on the equity markets dropped the stock for less defensive names.

LONDON

THE FTSE 100 index of blue-chip shares closed little changed, following Thursday’s rally. The index rose 6.63 points, or 0.1 per cent, to 5,868.55 at the close in London.

Tullow Oil gained 2.7 per cent to 1,445 pence after analysts at JP Morgan Chase raised its recommendation for the stock from neutral to overweight.

Bumi surged 14 per cent to 283 pence on reports Nathaniel Rothschild will form a group to counter the Bakrie family’s buyout offer for the Indonesian mining company. Mr Rothschild, who quit Bumi’s board last month, has held talks with potential partners and the company’s existing shareholders to fend off the buyout offer.

Royal Bank of Scotland fell 2.1 per cent to 281.3 pence after posting a loss. The taxpayer-owned lender reported a £1.38 billion loss in the third quarter after setting aside more money to compensate customers who were wrongly sold loan insurance.

Admiral Group Plc posted the biggest decline on the FTSE 100, falling 5.3 per cent to 1,081 pence after the company, which insures 3.6 million British vehicles, reported a 2 per cent drop in third-quarter revenue.

Debenhams dropped 3 per cent to 120 pence after Bank of America sold 30 million of the department-store retailer’s shares at 119 pence apiece on behalf of a client, according to a person familiar with the transaction.

EUROPE

NATIONAL BENCHMARK indices climbed in 16 of the 18 western European markets, with France’s CAC 40 rising 0.5 per cent and Germany’s Dax adding 0.4 per cent.

Beiersdorf jumped 7.2 per cent to €60.70, the highest price since at least January 1996, after the maker of Nivea skincare products raised its 2012 forecast for sales growth to as much as 4 per cent.

A gauge of carmakers rose 1.2 per cent for the second-best performance among the 19 industry groups in the Stoxx 600. BMW advanced 2.7 per cent to €65 after saying US sales climbed 21 per cent in October. Daimler added 1.6 per cent to €37.09.

Alcatel-Lucent slumped 5.5 per cent to 77.9 cents after posting a third-quarter net loss of €146 million, compared with a profit of €194 million a year earlier.

The phone-equipment maker, whose shares have dropped 36 per cent so far this year, is France’s most-shorted stock, based on data compiled by financial-information provider Markit, signalling a growing number of investors are predicting further declines.

Deutsche Telekom dropped 2.6 per cent to €8.66. The company may cut its dividend from next year by as much as a third, Handelsblatt reported.

US

EARLY GAINS in New York were erased, paring Thursday’s rally, as the better-than-forecast payrolls data failed to prevent commodity and technology stocks from slumping.

Energy stocks were a drag on the market after Chevron Corp, the second-largest US oil company, posted a profit that missed expectations. The stock fell 2.9 per cent to $108.26 and was one of the biggest drags on the Dow industrials. The dollar’s strength also hurt energy and materials shares. Eventually, all 10 SP 500 sectors succumbed to selling pressure to end lower. – (Additional reporting: Bloomberg/ Reuters)