Markets open weaker across the board

Macro concerns dominated the markets yesterday. In Europe, uncertainty reigned with regards to the prospects of another Italian prime minister following Mario Monti’s intention to stand down early while, in the US, budget deficits and the fiscal cliff were the focus.

DUBLIN

Markets opened weaker across the board, but Ireland still underperformed the rest of Europe, albeit only marginally. The Iseq fell by 0.53 per cent, or 17.68 points, to close down at 3330.09.

Despite the announcement of its new tie-up with Virgin Atlantic, Aer Lingus was weak on the day, giving up one cent, or 0.9 per cent to close at €1.08.

Ryanair was also down, on light volumes. It fell back by six cent, or 1.1 per cent, to close down at €4.79.

CRH gave up a cent or 0.07 per cent to finish at €14.43, “on very light volumes”.

DCC completed the acquisition of Statoil Fuel Retail’s industrial LPG business in Sweden and Norway but, as one broker noted, it has “struggled to trade over €24 for the past few days”. Yesterday was no different and it gave up 25 cent, or 1 per cent, to finish the day down at €23.75

Packaging group Smurfit Kappa fell back by 24 cent, or 2.6 per cent to close at €8.94, “for no particular reason” noted one broker, adding that it was likely just some profit taking.

LONDON

The blue-chip FTSE 100 closed up by 0.1 per cent, or 7.23 points higher, at 5,921.63. After falling back in early trading, it pared those losses and gained ground after breaking through and holding above the technically important level of 5,910 points – a level where it had previously tended to fall back.

Healthcare company Smith & Nephew topped the FTSE 100 leaderboard with a 1.9 per cent gain, after Investec raised its rating on the company to “buy” from “hold”.

Major mining stocks such as Rio Tinto also contributed to much of the FTSE’s gains, with the FTSE 350 mining index gaining 0.3 per cent.

EUROPE

European stocks managed to eke out a slight gain yesterday, led by French-Italian company STMicroelectronics after it announced plans to quit a loss-making joint venture.

The Stoxx Europe 600 Index rose 0.1 per cent to 279.55, after earlier declining as much as 0.6 per cent. In Frankfurt, the Dax added 0.2 per cent as did the Cac 40 in Paris.

STMicroelectronics gained 4.2 per cent to €5.21 in Milan, as the European chipmaker, struggling with weakening demand and competition from Asia, will sell its stake in the ST-Ericsson joint venture by the third quarter of next year as part of a new strategy to make the company more profitable.

UniCredit, Italy’s biggest bank, sank by 5.2 per cent, leading the benchmark FTSE MIB Index to the biggest drop in a month, as Prime Minister Mario Monti said he will resign.Banca Monte dei Paschi fell by 5.9 per cent to €19.32 and Intesa Sanpaolo dropped by 5.2 per cent to €1.22.

NEW YORK

US markets rose yesterday, as leaders continued to negotiate on budget cuts

“As far as our market goes, I don’t think there’s anything out there right now. It’s waiting on the politicians,” said Tom Wirth, senior investment officer for Chemung Canal Trust in New York.

Apple, the largest company by market value, increased by 0.7 per cent after slumping 8.9 per cent last week. Topeka Capital Markets said in a note that the company’s fundamental trends remain strong and “we expect the stock to snap back sharply” following selling stemming from tax-related and technical reasons.

Hewlett-Packard, Cisco Systems and Microsoft each rose more than 1.5 per cent to lead gains in the Dow Jones Industrial Average. McDonald’s, the largest restaurant chain, added 1.1 per cent as its November sales rose by 2.4 per cent globally.

(Additional reporting: Reuters/Bloomberg)