Better than expected company results lead European shares higher
Strong interim management statements in Dublin have little impact on market
Aer Lingus shares climbed 3.5 per cent in Dublin yesterday
Stocks pushed higher yesterday as investors remain optimistic that economic growth is picking up, with many companies reporting better than expected results. The FTSE 100 closed the day at its highest level since October 2007, while the Stoxx Europe 600 was at its highest since June 2008.
A flurry of strong interim management statements did little to the Dublin market yesterday, with the Iseq index of Irish shares finishing the day virtually unchanged at 3,975.
It was a good day for Aer Lingus which climbed 3.5 per cent to €1.44. One Dublin stockbroker attributed the gain to expectations its pension payment problem will be resolved.
Ryanair also finished the day on a positive note, albeit marginally, with investors cautious about results out next Monday.
Food group Glanbia came off Monday’s high of €11, declining to finish yesterday at €10.80.
Paddy Power was down nearly 1 per cent on light volumes despite issuing a solid interim management statement which showed its group net revenue was up 20 per cent so far this year.
Irish Continental Group declined 2.8 per cent to €21.29. The group yesterday reported a rise in revenue to €472.1 million for the first four months of the year, up from €70.4 million during the same time last year.
UK stocks climbed, extending their highest level in 5½ years, as merger and acquisition activity in the utility industry offset a selloff by metal producers.
Severn Trent soared 14 per cent after confirming that a consortium of investors has approached it about a possible takeover.
Rival utility companies Pennon and United Utilities advanced 4.4 per cent to 695 pence and 2.8 per cent to 760.5 pence respectively.
Babcock International rallied 6.8 per cent after reporting a 14 per cent increase in full-year operating profit to £376.6 million. Babcock, which helps design submarines for the UK government, said that new contracts enabled it to grow.
Lonmin sank 7.3 per cent after halting operations at its Marikana mine in South Africa.
The FTSE 100 index rose 54.4 points, or 0.8 per cent, to 6,686.06 at the close in London, extending its highest level since October 2007.
European stocks advanced as companies including European Aeronautic Defence and Space (EADS) and Deutsche Post rallied after reporting earnings, offsetting German investor sentiment that gained less than forecast in May.
EADS advanced 3 per cent after earnings beat analysts’ projections. GDF Suez , Europe’s largest utility by market value, fell 0.9 per cent to €16.58, paring earlier losses of as much as 4.4 per cent.
German stocks advanced for a sixth day to a record high as shares of automakers rallied and Deutsche Post rose after reporting better-than-forecast earnings. Deutsche Post advanced 3.9 per cent to an almost five-year high of €19.56.
The DAX index advanced 0.7 per cent to 8,339.11 at the close of trading in Frankfurt, for its longest winning streak in almost 14 months. France’s CAC 40 rose 0.5 per cent.
The Stoxx Europe 600 index added 0.4 per cent to 305.66 at the close of trading, its highest level since June 2008.
US stocks rose in early trading yesterday, with the Dow and the S&P 500 hitting new intraday highs as investors bet that the market’s upward momentum would keep going.
Gains were broad, with more than two-thirds of New York Stock Exchange-listed companies’ shares rising and almost 640 securities hitting 52-week highs, including Chevron and Visa . Growth-orientated stocks were among the day’s biggest advancers, with large-cap bank stocks leading the way. – (Additional reporting: Bloomberg, Reuters)