Stocks advance as sentiment improves

Europe’s share rally continued yesterday as good news boosted leading stocks and there were signs that German economic sentiment has improved.

Most European markets advanced, while Bloomberg reported that London’s FTSE climbed to a five-year high.

Bayer, Danone and Drax all made ground, while German investor confidence increased to the highest level in almost three years in February.

Some analysts suggested that there may still be room for growth in European stocks.

DUBLIN

The Irish market joined the general rally, although dealers suggested it underperformed other exchanges slightly.

Ryanair closed 1.4 per cent up at €5.78 after climbing steadily during the day.

Packaging group Smurfit Kappa overtook the €11.50 mark to close at €11.59.

Bookmaker Paddy Power was another leading performer,gaining 1.8 per cent to €66.25, which dealers suggested was an all-time high. Over 160,000 of its shares changed hands in Dublin yesterday.

APN, the Australian group 28 per cent owned by INM, returned to Sydney exchange yesterday. It shed 8.3 per cent to close at 28 Australian cent.

LONDON

Drax Group, the operator of Britain’s biggest coal-fired power station in Selby, Yorkshire, advanced 6.1 per cent to 641.5 pence, the highest price since November 2008. The company reported that earnings before interest, taxes, depreciation and amortisation fell to £298 million last year, beating analysts’ prediction of £293.2 million. Drax also said it was accelerating a plan to convert the plant to burn biomass.

Wireless carrier Vodafone dropped 2 per cent to 163.5 pence after Bernstein lowered its recommendation on the shares to underperform, the equivalent of sell.

Analysts led by Robin Bienenstock predicted that Vodafone’s European assets would shrink by 23 per cent in the next three years as the company faces “structural decline”.

EUROPE

Bayer rose €2.50 to €71.79 after saying it began a phase-three trial of the Eylea diabetes injection along with Regeneron Pharmaceuticals.

MTU Aero Engines Holding rose 2.9 per cent to €71.08, its biggest advance since September, after saying group revenue would increase 10 per cent to 12 per cent in 2013. Germany’s biggest aircraft engine maker posted 2012 adjusted operating profit of €374.3 million, beating its own forecast of €370 million.

ThromboGenics soared 5 per cent to €39.45 for its biggest increase in two months. The Belgian drug-maker will join the nation’s benchmark Bel20 index next month.

SEB rose 4 per cent to €62.38, its biggest jump in seven months, thanks to US talk-show host Oprah Winfrey, who recently tweeted that one of its electric fryers had changed her life, and added that they were not paying her to say so.

The world’s biggest yogurt maker Danone jumped 5.9 per cent to €53.15 as it said it planned to cut 900 jobs in Europe after 2012 profitability declined on weak consumption in the south of the continent.

US

US stocks rose, sending the Standard & Poor’s 500 index to its highest level in five years, on optimism over deal-making. Data compiled by Bloomberg showed that deals worth nearly $40 billion were announced in the US on February 14th, bringing the total this month to more than $140 billion.

Office Depot, the second largest office-supplies retailer, added 50 cents to $5.09, and OfficeMax rallied $2.38 to $13.13. The companies have discussed a stock swap that would create a single office-supply retailer to compete with Staples.

Best Buy advanced 47 cents to $17.34 after analysts rated it a buy. Cheerios maker General Mills added 1.6 per cent to $45.28 after saying that 2012 profits would increase in its next financial year. Additional reporting: Bloomberg