Stocks rise in Europe as earnings beat forecasts
Stronger Chinese manufacturing lifts markets, though Iseq closes down
Daimler, the world’s third-largest maker of luxury vehicles, said third-quarter earnings before interest and taxes rose 16 per cent to €2.23 billion
European stocks advanced as companies posted earnings that beat estimates, while a report showed China’s manufacturing strengthened this month more than forecast.
Equities had briefly pared gains earlier in the day after the advance reading of an index for euro-area manufacturing and services came in lower than expected, dropping to 51.5 this month from 52.2 in September.
The Iseq flatlined for most of the day and finished down 0.4 per cent. Aer Lingus and Ryanair were both under a little bit of selling pressure, with the former closing down 2.7 per cent at €1.40. Ryanair fell 1.8 per cent at €6.33, with some 6 million shares changing hands across its Dublin and London listings.
Independent News & Media continued its recent advance, closing up 17.7 per cent to 12 cent, as retail buyers circled ahead of a suspected raising of funds by the stock.
There was a block trade in insulation-maker Kingspan, with 2.5 million shares changing hands at the €2.50 level, and the stock climbed 2.8 per cent to €12.70. Paddy Power drifted off again, finishing down 1.4 per cent at €56.70.
The FTSE 100 increased 0.6 per cent, rebounding from its first drop in 10 days, as investors digested news of the strengthening in Chinese manufacturing.
Aberdeen Asset Management, Scotland’s largest fund manager, advanced 5.8 per cent to 450.4 pence. The company said it was in talks with Lloyds about a possible acquisition of the lender’s Scottish Widows unit and the formation of a “strategic partnership”.
Sports Direct lost 3.8 per cent to 685 pence after founder Mike Ashley sold a part of his stake. Goldman Sachs managed the sale of a 2.7 per cent stake in the UK’s largest sports retailer on behalf of Ashley at 662.5 pence per share.
Diageo, the world’s biggest distiller, slid 0.8 per cent to 2,012.5 pence, its first retreat in seven days, after French rival Pernod Ricard said a slowdown in emerging markets will stifle profit growth.
Debenhams, the UK’s second-largest department-store chain, fell 8.8 per cent to 101 pence. The company reported full-year earnings that were in line with analysts’ estimates, but it said costs will increase with inflation and remained cautious on the strength of consumer demand.
The Stoxx Europe 600 Index increased 0.4 per cent to 320.38 at the close of trading in London. The index has risen 3.2 percent this month as US lawmakers agreed to extend the government’s borrowing authority until 2014.
National benchmark indexes advanced in 15 of the 18 western-European markets, with Germany’s DAX adding 0.7 per cent and France’s CAC 40 climbing 0.4 per cent.
ABB added 5 per cent to 23.05 Swiss francs. The world’s biggest maker of power transformers reported that third-quarter net income rose to $835 million, beating analysts’ expectations.
Daimler climbed 3.3 per cent to €60.32. The world’s third-largest maker of luxury vehicles said third-quarter earnings before interest and taxes rose 16 per cent to €2.23 billion, which also came in ahead of forecasts. A gauge of automobile and auto-part makers posted the biggest gain of the 19 industry groups in the Stoxx 600, with BMW adding 1.9 per cent to €83.56.
Celesio jumped 5.4 per cent to €22.90. McKesson, the largest US pharmaceutical distributor, agreed to buy a majority stake in the German company and make a tender offer for the remaining publicly traded stock.
Stocks rose as corporate earnings surpassed estimates and investors weighed manufacturing data from the world’s two largest economies. The S&P 500 rose 0.3 per cent by lunchtime in New York.
– (Additional reporting: Bloomberg)