Markets surge on Draghi statements

ECB president’s signal that stimulus will continue gives boost to markets

Building materials group CRH gained 1.54% to close at €24.685 on trades totalling more than 800,000 shares

Building materials group CRH gained 1.54% to close at €24.685 on trades totalling more than 800,000 shares

 

Markets surged yesterday after European Central Bank (ECB) president Mario Draghi signalled that its stimulus programme would continue well into next year.

The news buoyed stocks on both sides of the Atlantic. The Stoxx Europe 600 index added 2 per cent, the most since October 5th, while Wall Street also responded positively.

DUBLIN

The Irish market enjoyed gains across the board. Building materials group CRH gained 1.54 per cent to close at €24.685 on trades totalling more than 800,000 shares.

However, another leading stock, insulation specialist Kingspan, saw its shares tumble 4.11 per cent to €21. Traders blamed reports of weakness in the UK and other markets from Travis Perkins and Sheffield Insulation Group for the fall.

Ryanair, whose shareholders backed a plan to distribute €398 million from the sale of its Aer Lingus stake, ended 0.56 per cent ahead at €13.455.

Multinational packaging group Smurfit Kappa was largely flat, gaining just 0.06 per cent to €24.765, despite an upgrade from Goldman Sachs.

Foods group Kerry added 2.31 per cent to close at €71.12. In the same sector, Glanbia added 0.47 per cent to close at €17.03

LONDON

Disappointing results from some companies took some of the sheen off gains in London, whose leading FTSE 100 was volatile in the immediate wake of Mr Draghi’s statement.

Travis Perkins, the owner of DIY stores Wickes and heating supplies group BSS, fell 6 per cent after saying that its full-year earnings would be at the lower end of expectations.

The news had a knock-on effect on Irish-based, London-listed Grafton, whose shares tumbled 4.2 per cent.

Anglo American fell 1.3 per cent after it said that it was postponing major project investment decisions at its platinum unit until at least 2017 and had cut diamond production in the face of weak demand.

Educational publisher Pearson also struggled, losing 4.9 per cent after several broker downgrades.

EUROPE

Orange rallied 7.5 per cent after raising its annual profit forecast. Logitech International surged 9.6 per cent after the Swiss maker of computer mice reported profit and revenue that beat projections.

Irish Distillers owner Pernod Ricard climbed 5.2 per cent after it forecast that earnings will increase this year.

Novozymes jumped 11 per cent as the Danish biotechnology company posted earnings that beat projections. Publicis Groupe SA tumbled 7 per cent after saying it recorded no growth in September.

Deutsche Bank AG advanced 2.5 per cent after people familiar with the matter said the company may cut the bonus pool for its investment bank by almost a third.

Other stocks moved on deals activity. Deutsche Wohnen rose 5.2 per cent after abandoning its €4.6 billion-euro offer to buy LEG Immobilien to focus on defending itself against a bid from Vonovia. LEG added 5.1 per cent and Vonovia 6.4 per cent.

Irish-Swiss food group Aryzta rose 3.5 per cent to 46.68 Swiss francs.

US

EBay rose 12.9 per cent to $27.29 and Texas Instruments was up 10.3 per cent at $57.22 after better-than-expected results late on Wednesday. The optimism even spread to companies with poor results yesterday. Caterpillar reversed course to trade up 5.6 per cent at $72.78, while 3M rose 4.2 percent to $156.17.

Valeant Pharmaceuticals continued its slide for the fourth day, falling 18.4 per cent to $96.80. Community Health Systems sank 34.5 per cent to $26.54 after its forecast disappointed, dragging down hospital operators Lifepoint, HCA Holdings and Tenet Healthcare.

American Express fell 5.8 per cent to $72.09 after its quarterly profit missed estimates. Additional reporting: Bloomberg, Reuters