Stocks soar as US earnings season opens
Dublin closes up again as Smurfit Kappa shares gain 3.7% to break €13
Mining company Alcoa kicked off the US earnings season with results that beat analysts’ estimates.
European stocks rose to their highest level in almost a month as miner Alcoa kicked off the US earnings season with results that beat analysts’ estimates. Mining companies led gains in European markets after the US giant predicted that China will lead an increase in global aluminium demand.
The Stoxx Europe 600 index, which tracks leading stocks in 18 western European markets, gained 0.8 per cent to 294.58, its highest level since June 10th.
Traders reported a good day overall with strong early trade and followed by a dip and a further rally in the afternoon.
Ryanair traded at between €7.24-€7.27 during the morning before closing at €7.23, 0.63 per cent ahead. The stock’s movement typified the day, dealers said.
Food group Glanbia was one of the better performers, adding 2.81 per cent to close at €10.24. In the same sector, there was plenty of interest in Kerry Group, which rose 1.38 per cent to €45.60.
Elsewhere, packaging group Smurfit Kappa broke the €13 mark, gaining 3.72 per cent to close at €13.38, making it one of the best performers on the day among leading stocks.
Activity on the market is expected to pick up further next week when its first new entrant for a while, Green REIT, which is seeking to raise €200 million makes its debut.
Mining stocks surged in London following the news from the US. BHP Billiton gained 2.4 per cent to 1,729.5 pence while Rio Tinto climbed and 2.5 per cent to 2,736.5 pence.
Polymetal International, which operates gold and silver mines in Russia and a gold and copper mine in Kazakhstan, rose 6.7 per cent to 506 pence. Anglo American gained 3 per cent to 1,282 pence.
Royal Bank of Scotland was up 5.4 per cent to 304.4 pence, for its first back-to-back gains in almost a month. Goldman Sachs raised its rating on the state-owned lender to buy from neutral, saying a split of RBS would allow the bank to focus on profitable operations while accelerating a privatisation.
Aveva Group gained 14 per cent to 2,578 pence, its highest price since it sold shares to the public in 1996. The computer software maker said it has seen a “good start“ to the financial year, with demand growth steady in Europe, Africa and Asia and activity picking up in North America.
Utility EDF rallied 9.3 per cent to €19.40. France has given the energy supplier the go-ahead to raise power prices for households by 5 per cent next month and by another 5 per cent in August 2014, according to newspaper Le Parisien.
Luxury goods group LVMH gained 2.1 per cent to €131.40. The company agreed to pay €2 billion for 80 per cent of fashion house Loro Piana. The family owners of the maker of $1,385 cashmere sweaters will keep a 20 per cent stake.
Hikma Pharmaceuticals rose 2.2 per cent to 1,073 pence. The drugmaker jumped 5.6 per cent yesterday to its highest price since its initial public offering in 2005 after raising its estimate for revenue growth this year to 17 per cent, from a previous forecast of 13 per cent.
Siemens Unit Osram Licht, the lighting company spun off by Siemens, surged 17 per cent to €27.84 on its second day of trading in Frankfurt.
US stocks rose for the fourth session in a row as investors bet that companies would surpass the low bar set for earnings season, leaving room for better- than-expected results that could drive the rally further.
FedEx climbed on speculation that billionaire William Ackman would make a big investment in the company. FedEx shot up 4.4 percent to its highest close since mid-March.
In healthcare, Health Management Associates has attracted takeover interest from Community Health Systems and other rivals about buying the hospital operator, sources said. Shares of Health Management surged 8.3 per cent. – Additional reporting: Bloomberg