Stocks rise amid ECB stimulus hopes

Iseq reflects European positivity with most of its leading shares making good ground

Traders work at their screens in front of the German share price index DAX board at the stock exchange in Frankfurt yesterday. Photograph: Pawel Kopczynski/Reuters

Traders work at their screens in front of the German share price index DAX board at the stock exchange in Frankfurt yesterday. Photograph: Pawel Kopczynski/Reuters

 

Markets rose amid hopes that the European Central Bank’s (ECB) €1.14 trillion stimulus plans will spark economic growth in the region.

Analysts said that ECB president Mario Draghi’s commitment to spending €60 billion a month until September 2016 on public and private securities had helped reassure investors.

DUBLIN The Irish market reflected what was happening in Europe with virtually all its leading shares making good ground.

Multi-national packaging group Smurfit Kappa climbed 3.22 per cent to €21.50 on trades totalling 1.6 million shares.

Ryanair, which is due to report its third-quarter results the week after next, gained 2.17 per cent to €10.34.

Food group Kerry put in one of the day’s stellar performances, gaining 4.3 per cent to close at €65.19. The company’s index weighting is close to 13 per cent, so the move had a substantial knock-on effect on the Iseq.

Another index heavyweight, building materials giant CRH, added 3.4 per cent to close at €22.35 as the market continued to digest the news that it is in the running to do a €6 billion deal to buy assets that the merging Holcim and Lafarge are preparing to offload. Its price pushed past the €22.70 mark at one point.

Bank of Ireland was the worst performer on the day, despite the fact that its sector is likely to see immediate benefits from quantitative easing. It tumbled 5.23 per cent to close at 29 cent.

LONDON Britain’s leading shares index climbed to a four-month high and recorded its biggest weekly gain in three years.

However, traders noted that commodity stocks, which are under pressure because of difficulties largely outside the euro zone, were acting as a drag holding the FTSE 100.

The UK mining index fell 3.4 per cent. Antofagasta, Glencore and Rio Tinto fell 2.8 to 5.8 per cent. Metals and energy have a 22 per cent weighting in the FTSE 100 compared to around 6 per cent in other leading European indices.

Associated British Foods rose 3.18 per cent to 3,080 pence, with traders saying the stock was helped by an encouraging update from Premier Foods , up 10.9 per cent, and after data showed UK retail sales rose 0.4 per cent in December, beating expectations for a 0.6 per cent fall. Market watchers nominated the stock as one to follow chiefly because of the strong performance of its Irish subsidiary, Primark, owner of Penney’s, in the US.

EUROPE All western European markets except Austria and Iceland advanced. Spain’s IBEX 35 Index added 0.6 per cent, extending gains this week to the most since March 2013.

Germany’s DAX Index and France’s CAC 40 Index rose at least 2 per cent. The Swiss Market Index advanced 2 per cent.

Greece’s ASE Index surged 6.1 per cent for the biggest gain among 18 western European markets. The benchmark gauge has still tumbled 19 per cent from a December 8th high on concern the country’s anti-bailout party will win this weekend’s elections.

Cyclical stocks such as carmakers, which are expected to benefit from a lower euro, featured among the biggest gainers. BMW rose 4.9 per cent to hit a record high and Peugeot Citroen gained 2 per cent.

Some stocks rose on mergers-and-acquisitions activity. Telefonica added 3.4 per cent. Hutchison Whampoa said it has entered exclusive negotiations to buy O2, Telefonica’s Irish and British wireless carrier, for as much as £10.25 billion.

US Wall Street dipped as disappointing results from some companies offset optimism about events in Europe.

McDonald’s reported a drop in fourth-quarter comparable sales. General Electric reported lower sales in its oil and gas unit, though overall earnings rose. McDonald’s was down 1.1 per cent at $89.92.

– (Additional reporting: Bloomberg, Reuters)