Stock markets rise on Bernanke comments
Dublin fails to follow positive trend as mining stocks make big gains in London
A trader working on the floor of the New York Stock Exchange shortly after the market opened yesterday. Global stocks rose sharply after Federal Reserve chief Ben Bernanke suggested the US central bank may not yet wind down its stimulus policy. Photograph: Reuters/Lucas Jackson
“Highly accommodative monetary policy for the foreseeable future is what’s needed in the US economy,” Bernanke said late on Wednesday, while minutes from a meeting of the Federal Open Market Committee showed many Fed officials wanted to see more concrete signs that employment is improving before cutting back on bond purchases.
The Iseq couldn’t quite manage to follow the positive trend, however, as key stocks Ryanair, Kerry and Elan all slipped.
Pharmaceutical group Elan fell 3.1 per cent to €10.64, while Kerry dropped 1 per cent to €46.10, and Paddy Power shed 0.85 per cent to close at €66.23.
While Ryanair finished down 0.55 per cent at €7.11, there were better fortunes for Aer Lingus, which climbed 1.9 per cent to €1.63.
Building materials group CRH finished fractionally up at €15.47, while there were decent gains for drinks company C&C, which closed up 3.3 per cent at €4.14. Packaging group Smurfit Kappa rose 3.6 per cent to €13.57.
The FTSE 100 index rose 0.6 per cent at the close of trading, taking its rally this week so far to 2.6 per cent, after some mining stocks enjoyed double-digit gains.
African Barrick Gold, a producer of the metal in Africa, jumped 13 per cent to 111 pence, while Polymetal International, which operates mines in Russia and Kazakhstan, rallied 8.3 per cent to 519 pence.
Precious metals miner Fresnillo surged 13 per cent to 1,018 pence, its largest gain since July 2009.
BHP Billiton, the world’s biggest commodity producer, rose 4.6 per cent to 1,800 pence, while Rio Tinto Group, the second largest, advanced 4.6 per cent to 2,833.5 pence.
G4S, the world’s largest security provider, lost 5.6 per cent to 213 pence, its lowest price since August 2009, after the UK government referred the company to the serious fraud office, saying it overcharged for electronic-tagging services.
Associated British Foods climbed 5.1 per cent to 1,907 pence. The company said third-quarter revenue rose 8 per cent as sales at its Primark clothing outlets offset a decline at its sugar business.
The Stoxx 600 increased 0.6 per cent, completing its fourth consecutive daily gain.
National benchmark indexes rose in 15 of the 18 western-European markets, with Germany’s DAX rising 1.1 per cent and France’s CAC 40 closing up 0.7 per cent. However, in Portugal the benchmark PSI 20 index dropped 2 per cent as the future of its coalition government remained in doubt.
Banco Comercial Portugues slid 7.5 per cent to 8.6 cents, while Banco Espirito Santo declined 4.9 per cent to 59.6 cents.
Unibail-Rodamco, Europe’s largest publicly-traded property owner, rose 2 per cent to €188.10 as the real estate sector took Bernanke’s comments as reassurance that there are no interest rate increases on the horizon.
Renault slipped 2.1 per cent to €56.05 after analysts at Sanford C. Bernstein downgraded the shares to underperform.
On Wall Street the S&P 500 rose more than 1 per cent in early trading, while the Dow Jones was 0.9 per cent higher.
Among the first stocks due to publish performance figures in the US earnings season, JPMorgan Chase increased 0.2 per cent to $54.95, while Wells Fargo slipped 0.6 per cent to $41.81. The two lenders report second-quarter results today.
Hewlett-Packard increased 1.6 per cent to $26.34 after a report showed its sales of personal computers in the US fell less than 1 per cent in the second quarter. – (Additional reporting: Bloomberg)