Car stocks lead European shares higher

Dollar at near three-year high amid speculation on future of Fed’s asset-buying programme


Global equity markets rose and the dollar soared against a basket of currencies yesterday, reaching a near three-year peak, as speculation mounted over whether the Federal Reserve would soon begin to rein in its asset-buying programme.

European equity indexes climbed in sync with the US with a rally in car-makers’ shares, which were bolstered by signs of a revival in domestic sales.
Dublin’s Iseq index closed up seven points or 0.2 per cent at the close of business, at 4,004, on what was a “wishy washy day on the markets”.

Petroceltic stock was down almost 9 per cent following news that the company is close to reaching a binding agreement with a second farm-in partner for divesting a further 18.37 per cent interest in the Isarene permit.

The oil and gas exploration company said it would postpone its move to the official lists of the London and Irish stock exchanges as it sought to complete the second-farm out agreement for the Isarene permit in Algeria.

Financial services firm IFG , which has reported steady progress and a solid financial performance in its interim management statement, fell 2.7 per cent. One Dublin stockbroker said the IFG statement was “not particularly convincing” and that the stock was down on the back of it.

Ryanair came off Thursday’s highs of more than €6.40 to finish the week at €6.33 ahead of next Monday’s financial results.

Glanbia finished the week on a high, climbing 1.7 per cent to close at €11.08 on good volume. CRH also performed well, increasing 2.4 per cent to finish at €17.02.
Britain’s top share index hit fresh 5½-year highs yesterday, as banks were buoyed by an upgrade, the prospect of the end of state ownership in the sector and rotation out of defensive stocks. The FTSE 100 closed up 35.26 points, or 0.5 per cent, just 0.1 per cent off October 2008’s closing high and marking the index’s fourth successive week of gains.

Banks combined to add 18 points to the index, benefiting from an upgrade by UBS and led up by Lloyds and RBS . The banks, which both received state help during the financial crisis, gained 3.2 and 5.7 per cent respectively after Lloyds broke through the 61.2 pence level which the government regards as breakeven on its £20.5 billion rescue.
A rally in car stocks and strong US data helped European shares set a five-year high, recording their fourth consecutive weekly gain, with cyclical shares leading risers.

Renault , which rallied 17 per cent, led shares of car firms higher as the region’s car sales increased for the first time in 19 months. PSA Peugeot Citroen , Europe’s second-largest car-maker, jumped 15 per cent, while luxury car maker Daimler climbed 12 per cent.

Stocks were also boosted by earnings from Cie Financiere Richemont which beat analyst estimates. Richemont gained 13 per cent as it also proposed a dividend that surpassed projections.

The Stoxx Europe 600 Index advanced 1.2 per cent this week, completing its longest streak of weekly gains since March 15th. France’s Cac 40 added 1.2 per cent, while Germany’s Dax Index climbed 1.4 per cent.
US stocks also advanced, putting the Standard & Poor’s 500 Index on track for its fourth straight week of gains. Data showed Americans felt better about their economic and financial prospects in the first half of the month, with consumer sentiment at its highest level in nearly six years.

Northrop Grumman rose 3.8 per cent in early trading after increasing its share-buyback programme by $4 billion.

Boeing and JPMorganChase added more than 2 per cent to pace gains in the Dow Jones Industrial Average. – Additional reporting: Bloomberg, Reuters