Poor GDP in big states hits EU bourses

Most European stocks declined yesterday as investors digested poor gross domestic product (GDP) figures from Germany, France and Italy.

The German economy slid 0.6 per cent in the fourth quarter, while France’s GDP contracted by 0.3 per cent in the same period. Italy’s economy shrank 0.9 per cent. The contractions outweighed a greater decrease than expected in US jobless claims.

DUBLIN

The Iseq came through a fairly flat day of trading to close at 0.1 per cent off.

Belgian financial group KBC reported numbers that indicated there had been a slowdown in the pace of arrears formation in the Irish market, but this detail had little read-through for Bank of Ireland, which closed flat at 14 cent.

There were no major swings in any of the big stocks, with some pausing for breath after recent rallies. Cement-maker CRH was among those, closing fractionally down at €16.42, which was a performance in line with its peer group.

Paper and packaging group Smurfit Kappa was weak towards the close of the session, closing down 2.4 per cent at €11.23.

Aer Lingus fell back 2.4 per cent to €1.24, as investors continued to weigh up the impact of the breakdown in Ryanair’s bid.

LONDON

Stocks in London fell from their highest level in more than four years, as reports showed the German and French economies contracted more than forecast.

The FTSE 100 index of blue-chip shares fell 0.5 per cent, having risen on Wednesday to its highest level since May 2008.

Amec sank 7.3 per cent to 1,042 pence as the company said in a statement it had completed a £400 million share-buyback programme.

Carnival slipped 2.9 per cent to 2,500 pence, its biggest drop since December 20th, after saying a fire on the Triumph cruise ship will lower its earnings by 8 cents to 10 cents a share in the first half of 2013.

Britvic slid 7.1 per cent to 390 pence following a downgrade by analysts of the UK distributor of Pepsi after the Office of Fair Trading referred a potential deal with AG Barr to the Competition Commission.

AG Barr, which makes Irn-Bru and Orangina, slipped 2.5 per cent to 502.5 pence.

Man Group climbed 2.3 per cent to 111.1 pence, its highest in 10 months, amid reports the company may be bought.

EUROPE

National benchmark indexes fell in 13 of the 18 western European markets, with Germany’s DAX dropping 1 per cent and France’s CAC 40 retreating 0.6 per cent.

Nestle dropped 2.6 per cent to 62.80 Swiss francs after the company said its sales grew slightly less than analysts had expected.

BNP Paribas gained 2.9 per cent to €47.18. The bank plans to increase its dividend to €1.50 a share from €1.20 a year earlier. KBC Groep, Belgium’s biggest bank and insurer by market value, jumped 7.86 per cent to €30.55, the highest price in almost two years.

Anheuser-Busch InBev rose 6.2 per cent to €69.79, its biggest jump in 18 months. The world’s biggest brewer offered to cede full control of Corona distribution in the US to Constellation Brands for $2.9 billion.

US

Stocks erased early losses as a drop in jobless claims and Warren Buffett’s deal to acquire HJ Heinz tempered concern over shrinking economies in Europe and Japan.

Heinz surged 20 per cent after Buffett’s Berkshire Hathaway Inc and 3G Capital agreed to buy the company in a deal valued at about $23 billion.

US Airways Group slipped 4.4 per cent after agreeing to an $11 billion merger with AMR Corp’s American Airlines.

The Standard and Poor’s 500 Index rose less than 0.1 per cent to 1,520.71 at 10:42am in New York, reversing earlier losses of as much as 0.4 per cent. – (Additional reporting: Bloomberg)