Key markets end two days of gains

KEY EUROPEAN markets fell yesterday as Spanish region Catalonia signalled that it would shortly seek a bailout from Madrid, while Japan issued a downbeat assessment of its economy.

Catalonia says it will seek €5 billion from Spain’s central government. Last month, Madrid approved an €18 billion fund to aid regions hit by the financial crisis.

Japan’s government predicted that key indicators, such as personal consumption, housebuilding, exports, imports and industrial output in the world’s third-largest economy, would slow this year.

Markets responded by ending two days of gains.

DUBLIN

THE ISEQ finished in line with European markets after a day that saw a reasonable amount of corporate news. Traders said there was a reasonable amount of activity, sparked partly by yesterday’s announcements and also in anticipation of numbers from Grafton and Paddy Power, which are due today.

Insurer FBD, which reported a €600,000 profits rise to €22.2 million for the first six months of the year, actually shed more than 3 per cent to close at €8.38.

Healthcare services group United Drug, which announced that it was buying two US companies for €32 million, added 1.17 per cent to close at €2.601.

Insulation specialist Kingspan was one of the biggest movers, gaining 3.24 per cent to close at €7.898. One trader pointed out that “it does not take much to move the dial” on Kingspan.

Exploration group Petroceltic, which reported a narrowing of half-year losses and a number of key corporate developments, shed 2.11 per cent to close at 9.3 cent.

Of the companies due to report today, food group, Glanbia inched up by 0.85 per cent to €6. Paddy Power stayed virtually level at €52.82, up one cent. A number of brokers’ notes predicted that the listed bookmaker is set to produce a strong set of interims today.

Builders’ merchant and DIY specialist Grafton dipped slightly, losing 0.66 per cent to €3.15. Dealers said there may have been a small element of profit-taking ahead of today’s half-year numbers.

Market heavyweight and international building materials giant CRH, which accounts for about e third of the Iseq index, was quiet, ending the day 0.45 per cent down at €14.425.

LONDON

THE BENCHMARK FTSE 100 index marked the return from the bank holiday by falling less than 0.1 per cent.

G4S retreated 2 per cent to 261 pence. Net income fell to £29 million from £108 million a year earlier after failing to fulfil a staffing contract for the London Olympic and Paralympic Games.

“We were deeply disappointed that we had significant issues with the London 2012 Olympics contract,” chief executive officer Nick Buckles said in a statement.

Marks Spencer lost 2.4 per cent to 362.8p, paring last week’s rally. The stock surged 4.3 per cent on August 24th after sources claimed CVC Capital Partners had explored making a possible bid for the retailer.

Kingfisher fell 3.4 per cent to 276p after Bank of America downgraded Europe’s largest home-improvement retailer to underperform from buy.

EUROPE

THE STOXX 600 Index, which tracks key stocks in 18 western European markets, slid 0.7 per cent to 267.32 at the close, its lowest level since August 6th.

Spanish lenders dragged European banks lower. Santander slipped 0.8 per cent to €5.57. Banco de Sabadell fell 0.8 per cent to €2.10, while Bankia, which was nationalised earlier this year, lost 4.2 per cent to €1.17.

Vestas jumped 19 per cent to 40.19 kroner. Speculation that the world’s largest wind turbine maker may be a bid target rose after the Sunday Times said on July 1st that the company may put itself up for sale.

Ipsen gained 5 per cent to €19.49 after reporting first-half sales of €630 million, exceeding the average analyst estimate of €607 million. Full-year sales for specialty-care drugs should grow at the upper range of the company’s previous forecast of 8 per cent to 10 per cent.

US

STOCKS FELL following yesterday’s drop in the SP 500 Index, as investors watched economic reports ahead of Federal Reserve chairman Ben Bernanke’s speech on the economy.

KLA-Tencor, a maker of machinery used in the production of semiconductors, slumped 2.5 per cent after Deutsche Bank cut its rating. Lexmark surged 14 percent after it said it planned to cut 1,700 jobs and shut a factory in the Philippines as it explored a sale of its inkjet technology.

HJ Heinz gained 1.7 per cent after reporting preliminary profit that topped analysts’ estimates.

Nike rose 2.5 per cent after a Stifel Financial analyst said it gained market share during back-to-school shopping.

Movado jumped 17 per cent after raising its profit forecast for this fiscal year as sales of its branded watches gained. – (Additional reporting: Bloomberg)