Stocks advance to a six month high

THE EURO and global equity markets rose yesterday as the markets were boosted by positive manufacturing data from the US, China and Germany. European stocks advanced to a six-month high, with the Stoxx Europe 600 Index extending its best start to a year since 1998, boosted by the PMI figures which were in line or ahead of expectations.

DUBLIN

AFTER A subdued morning, the Irish market picked up in afternoon trading, finishing above the 3,000 mark at 3,063, a gain of 1.8 per cent.

Macroeconomic data drove investor activity, with little stock-specific news on the market.

Financial stocks fared well in line with the European trends. Bank of Ireland rose 7 per cent to €0.122, with traders reporting “good buyer interest” in the stock.

The bank announced a series of changes to its group structure yesterday, as well as the appointment of Andrew Keating as chief financial officer.

Almost all the big names on the Irish Stock Exchange advanced yesterday.

Ryanair added 1.4 per cent to finish at €4.24 following positive results on Monday. However, Aer Lingus slipped slightly, after enjoying a strong surge in recent days, following news that is dealing with its pension deficit issue. Aer Lingus lost just under a half a per cent to €0.87.

Ferry company Irish Continental added 1.4 per cent to €14.90 amid reports that Fastnet, the company which operates the Swansea-Cork ferry service and is in examinership, is still in need of a funding solution.

Overall, almost all stocks ended the session in positive territory, with only a handful of names losing ground.

LONDON

LONDON’S BLUE-chip index rose 109.11 points, or 1.9 per cent to 5,790.72 although the index closed below 5,800, where traders said they were seeing some technical resistance.

Banks were the top gainers as talk among traders was that a debt-swap deal for Greece could be imminent, although no fresh news leaked.

Lloyds Banking Group and Barclays rose 5.2 and 5.4 per cent, respectively. Shares in asset managers Man Group and Schroders climbed 5.2 and 8.7 per cent, as a deal for Greece would remove some of the uncertainty which has dented markets and exacerbated fund outflows.

The uncertainty in the euro zone and the subsequent constraints on market liquidity have hit profits at Icap, but the interdealer broker rose 7.7 per cent after it announced job reductions and cut its full-year forecast toward the upper end of analyst forecasts.

Rolls-Royce added 4.8 per cent as Bank of America Merrill Lynch raised its earnings estimates and target price for the engines manufacturer. Heavily shorted Ocado rose 12.7 per cent after the British online grocer forecast first-quarter sales growth of about 10 per cent, easing concerns about its prospects after a profit warning last month.

Johnson Matthey gained 5.3 per cent after the world’s largest supplier of catalytic converters said its second-half earnings would be “slightly ahead” of the first six months. That prompted BofA Merrill Lynch to raise its earnings per share forecasts and lift its price target 14 per cent to 2,150 pence.

EUROPE

EUROPEAN STOCKS advanced to a six- month high, with the Stoxx Europe 600 Index extending its best start to a year since 1998. Banks and carmakers led gains, boosted by the strong manufacturing data.

National benchmark indexes rose in 17 of the 18 western European markets. Frances CAC 40 added 2.1 per cent. The FTSE 100 climbed 1.9 per cent and Germanys DAX jumped 2.4 per cent.

Bank shares rose 3.8 per cent for the best performance on the Stoxx 600. Banco Santander SA, Spain’s biggest lender, advanced 3.6 per cent to €6.16.

Credit Agricole SA, France’s third-largest bank, rallied 7.4 per cent to €5.06. RWE, Fortum RWE, Germany’s second-largest utility, added 4.9 per cent to €30.68, while Fortum Oyj, Finlands biggest utility, gained 6.8 per cent to €17.94 after the company reported fourth-quarter net income of €421 million ($550 million), surpassing analyst estimates.

US

AMERICAN STOCKS advanced, erasing a four-day decline for the Standard and Poors 500 Index, amid signs that manufacturing across the world is strengthening. Financial and industrial shares led gains among 10 groups in the SP 500, rising at least 1.6 per cent. Morgan Stanley added 6.9 per cent as Facebook is said to pick the firm to take the lead on its planned initial public offering. The social network site was due to file plans with regulators to raise at least $5 billion in an initial public offering (IPO)

Whirlpool surged 17 per cent as the largest appliance maker projected earnings that beat forecasts. – (Additional Reporting: Reuters/Bloomberg)