European markets bounce back on hopes of Cyprus deal

Iseq inches ahead 0.89% as CRH rises on UK budget’s boost for builders


European stocks bounced back yesterday as investors were optimistic on a bailout deal for Cyprus, after the country rejected a tax on bank deposits as part of proposals on Tuesday.

However, UK markets closed flat after chancellor George Osborne delivered a mixed budget and halved growth expectations to 0.6 per cent for 2013.

The Irish market moved higher, tracking gains made in Europe, on hopes for a bailout deal for Cyprus. The Iseq added 0.89 per cent to close at 3,971 points.

CRH shares rose 1.3 per cent to €17.86. The stock rose as the UK government pledged to support first time home buyers in the 2013 budget, providing upside for builders, and positive figures on US highways.

Travel software firm Datalex gained 4.3 per cent to 0.87 cent on solid full year results showing a $1.1 million (€850,000) profit.

Budget airline Ryanair closed ahead for a second day, up 1.28 per cent to 616 cent, following its €12 billion deal for 175 new Boeing aircraft. Analysts at Davy also raised their target price on the stock yesterday, from 600 cent to 700 cent, retaining an ‘outperform’ rating.

UK markets closed slightly down after the country’s 2013 budget. The benchmark FTSE 100 slipped 8.6 points, or 0.1 per cent, to 6,433 at the close in London.

British finance minister George Osborne’s budget statement failed to spark much reaction from the equity market, though strength was seen from house builders after he announced a new plan to help struggling home buyers.

Barratt Developments posted the strongest gains, ahead 6.6 per cent, while stock in Taylor Wimpey, Redrow, Bellway and Persimmon also benefited from the announcement.

Anglo American was the biggest faller on the FTSE 100, down 2.6 per cent as the stock, alongside Aviva, HSBC and InterContinental Hotels, traded without the attraction of its latest dividend.

European shares broke a three-day losing streak yesterday as optimism grew on a bailout deal for Cyprus.

The FTSEurofirst 300 index closed up 0.3 per cent at 1,199 points while the euro zone's blue-chip Euro STOXX 50 index rose 1.4 per cent to 2,709 points.

Sanofi added the most to the FTSEurofirst 300, up 2.5 per cent and sent the pharmaceutical group to seven-year highs, as traders cited speculation that it could get regulatory approval for its Aubagio multiple sclerosis treatment.

European banks also moved ahead on the FTSEurofirst 300, on expectations that policymakers would find some solution for Cyprus’s funding crisis. National Bank of Greece and Italy’s Banca Popolare di Milano led a rally in banks, advancing more than 4 per cent.

Media group Vivendi rose 4.4 per cent to €16.22 in Paris trading as it was reported it is considering splitting off its biggest unit, telecommunications provider SFR, to focus on its faster-growing media businesses.

US markets ticked up as Federal Reserve chairman Ben Bernanke said it will continue with low interest results and large-scale bond buying, in an effort to boost the country’s economy and reduce unemployment.

The Dow Jones industrial average rose 55 points or 0.38 per cent, to 14,510; the S&P 500 gained 8 points or 0.51 per cent, to 1,556; and the Nasdaq Composite added 14.42 points or 0.45 per cent, to 3,244 points.

Software maker Adobe climbed 4.4 per cent after it reported fiscal first-quarter sales and profit that exceeded analysts' estimates, in intraday trade yesterday in New York.

FedEx slumped 6.4 per cent as it lowered its 2013 earnings forecast amid a widening customer shift to cheaper overseas shipments.

( Additional reporting: Bloomberg/Reuters )