Strong corporate data drives values

MARKETS ROSE across Europe yesterday, buoyed by good corporate news, stronger than expected jobs data from the US, and positive indications from the British and European services industries.

A report revealed that US businesses created 243,000 jobs in January, 140,000 ahead of forecasts. The figures also showed unemployment fell to 8.3 per cent, its lowest level in three years.

A survey of purchasing managers in the British and European services sectors indicated that new business increased last month.

DUBLIN

THE IRISH market was strong all day with most of the leading stocks making good headway and few fallers of note.

The Iseq’s biggest component, international building materials group CRH, added 2.94 per cent to close at €15.78.

Dealers said that the positive news from the US boosted investor interest in the stock.

But it was not only the market’s heavy hitters that added value. One of its smaller stocks, Bank of Ireland, posted a particularly strong performance.

The partially State-owned bank added 2 cent, which translates as more than 15 per cent, to close at 15 cent.

Almost 250 million of its shares changed hands in Dublin on the last day of a week that has been marked by a gain of almost 50 per cent in the stock’s value.

Dealers said there is strong momentum behind the bank’s shares at the moment. Higher volumes and higher prices are helping to attract more investors.

“There is a realisation that what they have been doing in Europe is for the sector generally,” said one trader.

He added that, in an Irish context, Bank of Ireland looks to be in the best shape among its peers.

By contrast, retail banking and life and pensions group Irish Life Permanent, shed 2.7 per cent to close at 3.6 cent.

Bad news elsewhere in its sector drew investors to low-cost airline Ryanair. The grounding of Malev’s fleet yesterday following on from Spanair’s troubles earlier in the week, left the market feeling that bigger players in the sector, such as Ryanair, were a much safer bet. It gained 2.14 per cent in trade to close out the session at €4.35. Almost 2.5 million of its shares changed hands throughout the day.

Cider maker CC also performed well, adding 4 per cent to close at €3.375.

LONDON

IRISH OIL and gas exploration specialist Tullow Oil, which is traded most heavily in London, added 1.53 per cent to close at 1,462p.

Tullow announced in the morning that it has received the green light from the Ugandan government for its deal to sell two-thirds of its interest in the east African country’s oil fields to French giant Total and China’s CNOOC, for $2.9 billion.

The Irish company was one of a number of FTSE 100 stocks to perform well on the back of good news from the US and Britain, where figures showed a pick-up in the services sector.

London’s blue chip index closed up 105 points, or 1.8 per cent, at 5,901.07, its highest close since July – taking its gains for the week to nearly 3 per cent. Since the start of 2012, this year it has added 4.6 per cent.

HSBC, Europe’s largest bank, rose 2.5 per cent to 559½p and Barclays gained 4.2 per cent to 237.45p.

Admiral Group Plc soared 7.9 per cent after extending some reinsurance partnerships. Hays climbed 7.3 per cent as the Daily Mail reported that Adecco SA is considering a bid for the recruitment firm at 150p a share.

BT increased 3.9 percent to 214p as Britain’s biggest internet service provider forecast that full-year earnings for the 12 months to March 31st would top £6 billion.

EUROPE

THE STOXX 600, which tracks leading shares in 18 western European markets, climbed 3.6 per cent to 264.6 this week, extending the January rally of 4 per cent that was the best start to a year since 1998. The equity gauge has gained 8.2 per cent in 2012 and is up 23 per cent since its 2½ year low on September 22nd.

Carmaker Daimler AG, climbed 3.1 per cent to €45.46 following the US jobs report.

Volvo AB rose 4.4 per cent to 94.70 Swedish kroner after the world’s second-largest truckmaker reported fourth-quarter earnings before interest and taxes that rose 26 per cent to $1.04 billion.

US

UP TO midday trading US stocks rose as strong economic data prompted analysts to predict that corporate earnings would be better than expected.

Bank of America added 4.6 percent to $7.80. Caterpillar, the largest construction and mining-equipment maker, increased 2.5 per cent to $113.11. Alcoa, the largest US aluminium producer, climbed 2.5 per cent to $10.68. FedEx, an economic bellwether, jumped 1.2 per cent to $93.92. Genworth Financial was the biggest gainer on the SP 500, up 13 per cent to $9.05. – (Additional reporting: Bloomberg/Reuters)