Iseq loses ground as most European markets gain on positive US data

Diageo loses 4.7 per cent in London,its biggest slump since February 2011

European shares recouped early losses and closed higher yesterday following the release of solid US growth data. Investors also stepped back in to buy oversold stocks. However, traders said stocks still remained vulnerable to emerging market concerns.

Figures showed the US economy was on solid ground in the fourth quarter as a result of robust household spending and strong exports, with the economy there growing at an annual rate of 3.2 per cent.

While most European bourses climbed, the Iseq slipped back by almost 1 per cent as some of its biggest stocks such as CRH and Smurfit Kappa fell. National benchmark indexes advanced in 12 of the 18 western European markets.

CPL Resources fell back by just over 2 per cent to close at €7.20 despite reporting half yearly figures that Goodbody said were "modestly ahead of expectations". The recruitment firm reported revenues for the first six months of about €184 million, up 14 per cent.

Smurfit Kappa fell by 2.23 per cent to close the day at €17.55. The paper and packaging giant is trying to push through price increases for some of its products.


Ryanair, which has announced several profit warnings in recent months, dropped 2.17 per cent ahead of its quarterly results on Monday. The stock closed at €6.35.

Diageo lost 4.7 per cent to 1,820 pence, the biggest slump since February 2011. Organic sales rose 1.8 per cent in the six months through December, missing the median analyst estimate of 3.5 per cent. The maker of Smirnoff vodka and Johnnie Walker whisky said operating profit excluding some items was £2.06 billion.

Standard Chartered dropped 2.1 per cent to 1,260.5 pence, falling for a seventh day, its longest losing streak since October. Jefferies rated the bank as underperform, citing slower than expected revenue growth and the lender's lack of readiness for deterioration in credit markets.

BSkyB climbed 4 per cent to 878 pence. The UK's largest pay-TV broadcaster said first-half sales rose 6.3 per cent to £3.76 billion as it signed up more customers for broadband and TV services.

H&M dropped 3.6 per cent to 276.90 kronor. Europe's second biggest clothing retailer reported fourth-quarter net income of 5.61 billion kronor, less than the average analyst projection of 6 billion kronor.

Givaudan gained 6.3 per cent to 1,342 Swiss francs. The world's largest maker of flavours and fragrances said 2013 net income was 490 million francs, exceeding the 464.5 million franc analyst projection.

Royal Dutch Shell gained 1.5 per cent to €26.15. Europe's largest oil producer dropped targets for cash flow, postponed plans to drill in Alaska and pledged to restructure its shale operations in North America in an effort to revive earnings.

The Hague-based company said profit fell 48 per cent from a year earlier to $2.9 billion in the fourth quarter.

Facebook rose 16 per cent to $62.06 in the afternoon's trading. The social network reported that revenue jumped 63 per cent to $2.59 billion in the fourth quarter, beating the average analyst estimate of $2.35 billion. Profit of 31 cents a share exceeded the 27 cent average projection of analysts.

Google gained 2.7 per cent to $1,136.95 after Lenovo Group agreed to buy its Motorola Mobility mobile phone business for $2.91 billion. The Chinese PC maker will pay $1.4 billion in cash and its own shares and $1.5 billion in a three-year promissory note.

Blackstone Group, whose Irish investments include a one-fifth stake in Eircom, jumped 5 per cent to $32.46 after it posted a record fourth-quarter profit. – (Additional reporting: Bloomberg/Reuters)