Positive data drives European rally

IT WAS another good day of trading on European exchanges as strong auctions of euro zone debt and encouraging results from the top US banks sparked a rally across the continent.

DUBLIN

TRADING WAS described by one trader as “strong” with an “optimistic mood” among investors. The market closed up almost 2.9 per cent on the day.

About 110 million shares changed hands in a busy session.

“There was good buying interest around,” a trader said.

Strictly speaking, troubled cement group Readymix was the biggest mover of the day, up a whopping 533 per cent.

This reflected French company Cemex’s offer to purchase the 40 per cent of Readymix that it does not already own for 22 cent a share.

Readymix’s shares closed the day up 3 cent at 19 cent.

Bank of Ireland closed up just over 13 per cent, helped by gains made by financial stocks across Europe.

Aer Lingus was up 9 per cent at 72 cent while CRH gained 5.2 per cent at €16.20.

Greencore, the world’s biggest sandwich maker, enjoyed a late flourish to trading in Dublin. The stock closed up 5.8 per cent at 66 cent. The company is quitting the Dublin market at the close of trading today and moving its listing to London from Monday.

Among the losers, resource company Petroneft declined by 7.4 per cent to 19.9 cent. This followed a decision by investment group Bluegold to cash in its 4.5 per cent holding in the company, selling the shares in the market yesterday.

LONDON

THE FTSE 100 hit a five-month high after encouraging bond auctions in France and Spain boosted hopes that cheap credit recently made available by the European Central Bank had helped shore up the financial system.

The FTSE 100 rose 38.8 points to 5,741.15, with lenders leading the way after being buoyed by improved results from Bank of America and a better than expected performance from Morgan Stanley in the US.

Barclays was the biggest riser up 10 per cent, or 20.3p at 221.4p. Lloyds was ahead 9 per cent, or 2.7p at 32.3p and Royal Bank of Scotland was up 2.2p at 27.1p.

The strong performance of banks allowed London’s leading shares index to build on recent gains after breaking through the 5,700 barrier for the first time in three months on Wednesday.

The retail sector remained in focus after Associated British Foods hailed “exceptional” trading at its Primark (it trades as Penneys in Ireland) and sugar businesses in the 16 weeks to January 7th.

Primark’s sales were up by 16 per cent and the Kingsmill and Twinings owner added that it expected further profit improvement in the forthcoming year. Its shares advanced 22p to 1159p.

EUROPE

STOCKS GAINED for a fourth day, extending a five-month high for the Stoxx Europe 600 Index, as Spain and France sold bonds at lower yields and fewer Americans than forecast filed claims for jobless benefits.

Commerzbank led a rally in financial shares, surging 15 per cent, after outlining measures to boost capital. Alstom, the world’s third-largest power-equipment maker, jumped 14 per cent after predicting “strong” orders in its fourth quarter.

Carrefour, the biggest retailer in Europe by sales, dropped 1.1 per cent after saying profit was at the lower end of its forecasts.

The Stoxx 600 added 1.2 per cent to 256.57 at the close.

The Greek government headed into a second day of talks with private creditors in an attempt to reach an accord that would cut the nation’s debt. Greek prime minister Lucas Papademos is racing to tie up the deal, key to a second financing package for the cash-strapped country, before a March 20th bond payment that will cost €14.5 billion.

National benchmark indexes rose in all of Europe’s 18 western markets, except Iceland.

US

STOCKS ROSE for a third day in early trading as Bank of America Corporation posted a profit and jobless claims slid.

The S&P 500 rose 0.4 per cent to 1,313.0395 at noon in New York, and the Nasdaq climbed 0.7 per cent to finish at 2,790.10 – a 10-year high.

Bank of America led the Dow Jones Industrial Average’s gain, while Morgan Stanley and ebay also rallied.

Jobless claims fell to the lowest level in almost four years, while US economic reports and speculation that China will loosen monetary policy outweighed concern that downgrades for European nations would worsen the debt crisis. – (Additional reporting: Bloomberg/PA)

Dublin Closing Prices: Due to technical problems at our financial data supplier incorrect Dublin closing prices appeared yesterday’s edition. We apologise for any inconvenience caused and have taken steps with our supplier to resolve the problem.