European markets play Fed waiting game

There are gains for C&C, Next and Volkswagen, while Pearson and LinkedIn retreat

 Volkswagen gained 5 per cent to €183.50 after posting quarterly earnings before interest and taxes that jumped 20 per cent to €2.78 billion, exceeding average analyst estimates. Photograph:  Matthias Rietschel

Volkswagen gained 5 per cent to €183.50 after posting quarterly earnings before interest and taxes that jumped 20 per cent to €2.78 billion, exceeding average analyst estimates. Photograph: Matthias Rietschel

 


European stocks were little changed at a one-week high, while the FTSE 100 index of London-listed blue chips nudged up to a five-month high, as investors anticipated a recovery in corporate earnings and continued to bank on a delay to the Federal Reserve’s proposed tapering of bond purchases until next spring.

The US central bank’s Federal Open Market Committee announced a decision on its bond-buying plans after the close of European markets, confirming that it would wait for more sustained progress and “substantial” improvements in unemployment before pulling back from quantitative easing.

DUBLIN
The Iseq climbed 0.5 per cent, as major stocks CRH, Ryanair and Kerry all advanced. Cement-maker CRH edged up 0.3 per cent to €17.77, Ryanair climbed 0.8 per cent to €6.13.

There were bigger gains for food group Kerry, which rose 1.6 per cent to €47.10, while dairy processor Glanbia continued to ride high, a day after it said that results for the year are likely to be at the upper end of its previous guidance. It closed up 3.4 per cent at €10.19.

C&C’s stock was buoyed by the publication of its half-year results, which showed improved trading conditions in the second quarter, particularly in the drinks group’s Irish market. Its share price rose 3.7 per cent to €4.15.

Insulation-maker Kingspan was one of the few fallers, declining 1.3 per cent to €12.51.

LONDON
The FTSE 100 rose just under 0.1 per cent, its fifth consecutive gain, as retailer Next surged to its highest price in at least 25 years. The retailer raised its full-year profit target to £680 million and said full-year brand sales may increase by as much as 3.75 pre cent, which prompted a 4.7 per cent rally in its share price to 5,450 pence.

Pearson declined 3.6 per cent to 1,316 pence after forecasting that the margins for its education unit will drop in 2013 because of weaker demand in North America for college textbooks.

Standard Life slipped 4 per cent to 354.5 pence after reporting that its asset-management business received net inflows of £1.2 billion in the three months through September, less than half the £2.6 billion that it reported during the same period last year.

Marks and Spencer rose 1.6 per cent to 493.2 pence, after the Financial Times reported Britain’s largest clothing retailer has slowed a drop in its share of the clothing market.

EUROPE
The Stoxx Europe 600 Index added less than 0.1 per cent to 320.8 at the close of trading, after earlier climbing as much as 0.7 per cent, while France’s CAC 40 and Germany’s Dax dropped 0.1 per cent.

Eni rose 1.3 per cent to 18.35 euros after the Italian oil producer posted adjusted net income of €1.17 billion ($1.6 billion) for the third quarter, more than the €998 million that analysts had predicted.

Volkswagen gained 5 per cent to €183.50 after posting quarterly earnings before interest and taxes that jumped 20 per cent to €2.78 billion, exceeding average analyst estimates.

TomTom advanced 3.4 per cent to €6.10. The company forecast adjusted earnings of 25 euro cents a share this year. It had projected 20 euro cents apiece.

Fiat fell 2.2 per cent to €5.70, its lowest price since July. The Italian carmaker lowered its forecast for trading profit this year to €3.5 billion-€3.8 billion, down from an earlier projection of up to €4.5 billion.

US
On a day of volatile trading, stocks fell as investors assessed economic data and earnings ahead of the Federal Reserve’s announcement of its decision on whether to cut monetary stimulus. Western Union tumbled 12 per cent to $16.89 after saying costs tied to regulatory compliance will prevent operating profit from rising next year, while General Motors gained 3.2 per cent as quarterly profit topped estimates. – (Additional reporting: Bloomberg)