Euro at eight-week high against dollar

MACROECONOMIC NEWS was driving the markets across Europe yesterday, traders said, with Dublin performing in line with its peers.

Greece, the ECB, and US interest rates were the main issues being discussed.

The Iseq index finished down 0.48 per cent, with resources stock Aminex falling by a huge 36.5 per cent.

DUBLIN

TRADERS SPENT the day watching the wires for news about Greece, speculation about the ECB, and for the appearance of the chairman of the US Fed, Ben Bernanke, before the Senate Budget Committee in Washington.

The latter happened in the afternoon, Irish time, and Mr Bernanke’s comments that there was unlikely to be any interest rate hike through to late 2014, despite recent positive indicators from the US, came as something of a surprise.

His comments contributed to a large move in the euro – dollar exchange rate, with the euro hitting an eight-week high against the US currency.

They also provoked a fillup in the share price of building materials group CRH, which closed at €15.73, a rise of 0.74 per cent on the day.

Traders said developments in Europe, including the outcome of the meeting between Nicolas Sarkozy and Angela Merkel, and comments by the former ECB executive council member, Jurgen Stark, led traders to believe that Greece may exit the euro, but not until later this year when the European Stability Mechanism is put in place.

In relation to financials, one of the main issues was speculation as to the size of the upcoming Long Term Refinancing Operation from the ECB. It is due to occur on February 29th next and may be for up to €1 trillion in size.

How that fed into the market’s appetite for Bank of Ireland shares is anyone’s guess. The share remained unchanged, closing at €0.14.

This compared with a fall of 0.48 per cent in the Iseq index.

There was good volume in drinks group CC. It closed at €3.38, a fall of 0.56 per cent.

United Drug released a well-received update, with its non-Irish business performing well. The share closed at €2.03, a rise of 4.64 per cent.

Oil and gas explorer Aminex, fell 36.5 per cent to €0.04 after saying it is determining whether to drill at the Ntorya-1 exploration well in Tanzania.

LONDON

UK STOCKS were little changed as investors waited for Greece’s politicians to agree on spending cuts to secure further financial aid and China said its industrial-output growth may slow.

Commodity companies led declining shares, with Xstrata falling 4.9 per cent and Rio Tinto sliding 1.9 per cent. GlaxoSmithKline dropped 1 per cent after reporting sales that missed analysts’ estimates.

Shire gained 2.4 per cent as Goldman Sachs advised buying the shares.

The FTSE 100 Index slipped less than 0.3 per cent to 5,890.26 at the close in London.

A gauge of mining shares sank 1.9 per cent as copper declined for a second day on the London Metal Exchange.

Xstrata fell 4.9 per cent to 1,200p as Glencore International agreed to buy it for about £26 billion in shares.

Burberry, the UK’s largest luxury-goods maker, declined 1.8 per cent to 1,420p.

Shire gained 2.4 per cent to 2,179p. UK newspapers reported renewed speculation about a possible bid for the drugmaker.

EUROPE

EUROPEAN SHARES slipped but cut losses in late trade to stay near six-month highs on optimism that Greece is finally making progress towards a deal.

The pan-European FTSEurofirst 300 index of top shares fell 0.3 per cent to a provisional close of 1,072.19 points.

Banks reversed losses and finished higher.

BNP Paribas and UniCredit rose 2.1 and 4.7 per cent respectively.

However, Swiss bank UBS was down 1.4 per cent as earnings came in below forecasts.

US

US STOCKS rose, sending the Dow Jones Industrial Average above its highest closing level since May 2008.

Coca-Cola, the largest soft-drink maker, added 1.2 per cent as earnings beat estimates.

Yum!, owner of the KFC and Taco Bell fast-food chains, climbed 2.5 per cent as profit surged 30 per cent.

Walgreen, the largest US drugstore chain, slid 1.8 per cent as Citigroup cut its recommendation.

The SP 500 rose 0.2 per cent to 1,346.65 at 12.20pm New York time. The Dow advanced 31.86 points, or 0.3 per cent, to 12,876.99.

Greencore. Following its delisitng from the Irish Stock Exchange information on Greencore’s share price now appears under Irish Companies Quoted in London