Values slide on poor US housing data

MARKETS WERE flat or down slightly as weaker than expected housing data from the United States dampened optimism about the prospects of growth in the world’s biggest economy.

Data released yesterday showed that purchases of second-hand US homes dropped 0.9 per cent to a 4.59 million annual rate. Analysts were expecting the figure to be 4.61 million.

Britain’s budget produced few surprises and left analysts surmising that its government is trying to strike a balance between austerity and growth.

DUBLIN

The Irish market was largely flat with only poor volumes traded in the stocks that did attract attention.

An expected increase in cider duty in the British budget failed to materialise, which was good news for drinks group CC. About 1.3 million of its shares changed hands, but the stock finished 0.8 per cent ahead at €3.76 after having traded earlier around the €3.80 mark.

Recruiter CPL Resources, added 4 per cent to close at €3.10. Stockbroking firm Davy handed the stock an “outperform” rating.

Market heavyweight CRH treaded water, adding 0.34 per cent to close at €16.28 on the back of trades amounting to 800,000 shares. Among the other market leaders, packaging group Smurfit Kappa was down 2.6 per cent at €7, despite the news that Tony Smurfit had bought stock. Ryanair finished the session down 0.4 per cent at €4.27.

LONDON

Britain’s top share index made only a marginal gain after a volatile session coloured by the UK budget and the below par US data.

The blue-chip FTSE100 closed up 0.54 points, or 0.01 per cent, at 5,891.95, surrendering a 0.3 per cent gain in the closing auction. The index had fallen 1.2 per cent on Tuesday.

Index heavyweight Vodafone climbed 0.7 per cent to 172p on the back of a buy recommendation from Goldman Sachs.

Sainsbury climbed 4.5 per cent to 319.3p. The supermarket owner reported fourth-quarter sales growth that beat estimates and closed the gap on market leader Tesco.

Bookmaker Ladbrokes fell 1.7 per cent to 153.3p as the British chancellor signalled he is planning to tax online betting and duty on gaming machines.

Eurasian Natural Resources fell 2.9 per cent to 644p after the producer of metals in Kazakhstan and Africa reported a drop in full-year profit.

Weir Group, the world’s biggest maker of pumps for the mining industry, shed 6.3 per cent to finish at 1,857p for the biggest slide in the FTSE 100 as US rival Baker Hughes said profit was likely to dip.

EUROPE

Most European stocks declined as a report showed sales of previously owned US houses unexpectedly fell.

The Stoxx Europe 600 Index declined 0.1 per cent to 268.67 at the close. The gauge still has gained 9.9 per cent this year as the European Central Bank has disbursed €1 trillion to the region’s lenders and US economic data surpassed estimates.

“It’s possible we were a bit too optimistic,” said Benoit de Broissia, an analyst at KBL Richelieu Gestion in Paris, which oversees about $3.4 billion. “There are still a number of headwinds. We can’t say that residential real estate is a motor of growth for the US economy at this point.”

National benchmark indexes fell in 14 of the 18 western European markets. France’s CAC-40 lost 0.1 per cent while Germany’s DAX gained 0.2 per cent.

Adidas, the second-largest sporting-goods maker, fell 2.3 per cent to €57.64. TeliaSonera fell 3.7 per cent to 45.70 kronor, the biggest drop since August 18th, after the Finnish government sold 2.1 per cent of the shares for €451 million and €600 million of bonds to fund investments in the mining industry.

Banco Popolare gained 3.3 per cent to €1.65. The bank, which needs to fill a capital shortfall of €2.7 billion, said it can meet the target without capital market transactions. It reported a fourth-quarter net loss of €2.58 billion after a €2.83 billion writedown of goodwill related to its merger with Banca Popolare Italiana in 2007. Excluding the writedown, profit was €250 million, compared with the €175 million average estimate of eight analysts surveyed by Bloomberg. Metro, Germany’s biggest retailer, fell to €30.22.

US

Stocks were little changed amid concerns that the biggest first-quarter rally since 1998 had outpaced prospects for growth.

The disappointing housing figures depressed values. Morgan Stanley fell 1.5 per cent to $20.11. Citigroup retreated 0.6 per cent to $37.85. Hewlett-Packard slid 1.8 per cent to $23.55 as it announced plans to merge its PC and printer units.

Energy-related stocks also fell. Schlumberger fell 2.2 per cent to $74.06. Halliburton retreated 2.1 per cent to $34.02. Chevron dropped 1 per cent to $107.95. – (Additional reporting, Bloomberg)