Stocks await fiscal cliff developments

European stocks were little changed near a 19-month high as investors awaited developments in US negotiations to avoid the so-called fiscal cliff of automatic tax increases and spending cuts.

DUBLIN

The Iseq index slightly outperformed its European peers, closing up 0.26 per cent to finish at 3,397. CRH was the main driver of the advance, climbing 1.3 per cent, on the back of a solid run all week.

Fellow Iseq-heavyweight Ryanair continued its weak performance of late, closing fractionally lower at €4.77, as the market awaited clarity regarding the outcome of its takeover bid for Aer Lingus.

DCC finished up a half a per cent higher after the company announced the acquisition of Kent Pharmaceuticals for €71.2 million. Kent will be merged with DCC’s existing pharma business, DCC Healthcare, subject to Competition Authority approval of the deal.

Elsewhere, Paddy Power continued to find favour with investors, closing at an all-time high of €63.10.

UK

UK stocks steadied around nine-month highs at close yesterday, pausing within reach of the psychologically key 6,000 points mark. Investors were discouraged from pushing the market too much higher by the lack of progress by US politicians in talks to avoid fiscal changes that could lead the US into recession.

Shipping group Carnival dropped the most in 11 months in London trading after making 2013 earnings forecasts that were below analyst estimates. The world’s largest cruise line operator tumbled 6.1 per cent to 2,391 pence in London after it said it expected adjusted earnings per share in the range of $2.20 to $2.40.

Evraz , the Russian steelmaker partly owned by billionaire Roman Abramovich, led European commodity producers lower, falling 4.1 per cent to 267p, snapping four days of gains.

Weir Group rallied 2.8 per cent after it agreed to buy Mathena for as much as $385 million.

The world’s largest provider of pumps to mining companies said it would buy closely held Mathena, a maker of pressure-control products for shale drilling, for an initial payment of $240 million and profit-linked payments of $145 million over two years.

Centamin rose 3 per cent to 42.71p after the gold producer said production restarted at its Sukari mine in Egypt.

EUROPE

European stocks were little changed near a 19-month high as investors also awaited developments in US negotiations.

SBM Offshore soared the most in at least 23 years after seeking to settle a dispute with Talisman Energy.

Ericsson lost 1.9 per cent after taking an 8 bn-kroner charge related to its wireless-chip venture with STMicroelectronics. UBS, Switzerland’s biggest bank, dropped 1.3 per cent as it faces scrutiny in Hong Kong for possible misconduct linked to the citys interbank rates.

The Stoxx Europe 600 Index increased less than 0.1 per cent to 281.83, having swung between gains and losses at least 20 times during the session.

US

US stocks rose, with the SP 500 Index rebounding from its worst drop in five weeks, as house speaker John Boehner said he expected to keep working on a budget plan with President Barack Obama. Treasuries erased earlier gains and commodities trimmed losses.

NYSE Euronext was the SP’s biggest gainer, up 34 per cent after IntercontinentalExchange said it would buy the operator of the New York Stock Exchange for $8.2 billion. ICE shares shot up 1.4 per cent.

Herbalife lost 9.6 per cent following news that hedge fund manager Bill Ackman was betting against the company as part of his big end-of-the-year short.

An index of housing shares gained 0.78 per cent, but KB Home slid 6.4 per cent as it reported higher homebuilding costs and expenses in the fourth quarter. – (Additional reporting Reuters/ Bloomberg)