Europe advances as US treads water

European markets advanced yesterday, while US stocks edged ahead in later trading, as investors were reluctant to bet heavily ahead of President Obama agreeing a deal on the “ fiscal cliff” with Republicans.

DUBLIN

Dealers said that the Irish market enjoyed a “strong day”. There was more interest in Bank of Ireland, which ended 4.35 per cent up at 12 cent.

Traders suggested that investors see the bank as a “play” on the Republic and the indications that its economy is beginning to turn around. More than 98 million of its shares changed hands in Dublin yesterday.

International packaging group, Smurfit Kappa, continued its recent good run, adding 3.05 per cent to close at €9.25.

Ryanair fell 0.7 per cent to €4.905 from recent highs.

LONDON

Rolls-Royce Holdings slid 3.1 per cent, the most in six months. Europe’s largest maker of commercial aircraft and ship engines said it had unearthed possible wrongdoing in overseas business dealings and is under scrutiny by the UK’s Serious Fraud Office.

Imagination Technologies climbed 6.4 per cent to 426.5 pence after JPMorgan Chase said the company’s first-half results next week will meet or beat expectations. The stock has “considerable upside” in the medium term, they wrote.

Standard Chartered added 0.8 per cent to 1,500.5 pence as the lender said 2012 revenue may increase by a high single-digit percentage. Britain’s second-largest bank by market value also said it expected to reach a final settlement before year-end with US regulators after claims its transactions with Iranian clients violated sanctions.

Barclays rose 1.7 per cent to 250.5 pence as JPMorgan Chase included it among its top picks for European lenders.

Whitbread gained 1.2 per cent to 2,408 pence after Credit Suisse raised the owner of Costa coffee stores to outperform from neutral, meaning investors should buy the stock. The shares are up 54 per cent in 2012.

EUROPE

European Aeronautic Defence and Space jumped 8 per cent to €29.40 after the company changed its ownership structure to allow Germany and France to each hold a 12 per cent stake. EADS also said it would buy back as much as 15 per cent of outstanding shares.

Daimler advanced 1.2 percent to €38.65 after selling a 7.5 per cent stake in EADS, valued at €1.66 billion. The automaker will sell more of its remaining 7.5 per cent holding after a period of 180 days from the end of the selling the first tranche.

Zumtobel AG advanced 5.9 per cent to €9 after JPMorgan wrote the firm’s profit margins will improve.

GDF Suez tumbled 11 per cent to €15.29, the lowest price since its IPO in July 2005. Europe’s largest utility by market value said recurring net income will be €3.1 billion to €3.5 billion next year, compared with an expected €3.7 billion to €4.2 billion in 2012. Bank of America lowered its recommendation on the shares to the equivalent of hold, from buy.

Saipem SpA, Europe’s largest oil contractor by market value, fell 6.7 per cent to €30.49. Chief executive Pietro Franco Tali and Alessandro Bernini, chief financial officer at its biggest shareholder, Eni, resigned yesterday amid an Italian investigation into contracts in Algeria, the company said.

US

Apple rose 1.6 per cent to $547.29, reversing an earlier decline of as much as 3.7 per cent. It plans to spend more than $100 million next year on building Mac computers in the US, shifting a small portion of manufacturing away from China.

Starbucks gained 5.73 per cent to $53.70. The coffee giant was raised to outperform from neutral at Robert W Baird.

Freeport McMoRan dropped 4.2 per cent to $30.82 after being downgraded to market perform from outperform at BMO Capital Markets and Macquarie Group. The shares slumped 16 per cent on Wednesday after it agreed to buy Plains Exploration Production and McMoRan Exploration for $9 billion. – (Additional reporting: Bloomberg)