Europe rallies to 17-month high

European stocks rallied to their highest level in 17 months as optimism grew that US president Barack Obama will reach an agreement with Congress on a new budget. Stock markets across Europe, including Ireland, finished up about 1 per cent higher on average.

DUBLIN

The Iseq had a strong day, though it came off slightly towards the end of the trading session.

DCC was one of the best performers, closing up 4 per cent at €23.50. The cold snap may have been one reason for the uplift, according to traders, while electronics retailer Dixons, a customer of DCC Sercom, also posted positive results.

Bank of Ireland continued to find favour, trading up 9 per cent at the close at €0.118, with about 65 million shares traded in Dublin and 50 million traded in London.

Trading in Glanbia was muted yesterday, despite Wednesday’s first-round vote on the sale and spin-off of 10 per cent of Glanbia co-op’s shareholding in the plc. The share price lost 6 cents, to finish at €7.90.

C&C continued its positive run of late, finishing up 1.2 per cent at €4.10, on good volume.

LONDON

UK stocks climbed, sending the benchmark FTSE 100 to a three-week high, amid optimism US lawmakers will reach an agreement on budget talks to avert the fiscal cliff.

Rio Tinto jumped 5.1 per cent after the mining company announced a $5 billion savings plan.

Burberry rose 3.4 per cent as newspapers cited bid speculation as a reason for a rally in the retailer’s shares.

Invensys rallied 8.9 per cent after the sale of its rail unit to Siemens sparked speculation the company may become a takeover target.

The FTSE 100 gained 67.02, or 1.2 per cent, to close at 5,870.3. The index had lost as much as 4.8 per cent in the days following November 6th after Mr Obama’s re-election set up a showdown with the Republican-controlled House over the budget. The measure rallied 3.8 per cent last week.

EUROPE

Stocks reached their highest level in 17 months amid optimism about imminent agreement on the US’s fiscal cliff. The Stoxx Europe 600 Index advanced 1.2 per cent to 276.31 at the close in London, its highest level since June 1st 2011. National benchmark indexes advanced in every western-European market except Greece.

A European Commission report showed economic confidence in the euro area climbed in November from a three-year low. The index of executive and consumer sentiment in the region increased to 85.7 from a revised 84.3 in October.

Zurich Insurance rose 2.5 per cent to 236.50 Swiss francs after chief Martin Senn promised investors an “attractive and sustainable dividend”.

Volkswagen climbed 1.3 per cent to €165.80, its highest price in at least 20 years, after Europe’s largest carmaker said it will extend its partnership with China’s FAW Group beyond 2016, when the existing contract expires.

Electricite de France slid 1 per cent as the country’s highest court ruled that the utility has overcharged households.

On bond markets, Spain’s 10-year bond yields fell to the lowest in eight months and the rate on similar-maturity Italian debt dropped to the least since 2010.

US

Stocks rose, sending the Standard and Poor’s 500 Index to its highest level in three weeks, amid optimism Mr Obama will reach an agreement with Congress over a new budget.

Apple and Advanced Micro Devices led an advance in technology stocks, while Walt Disney, the world’s largest entertainment company, added 1.1 per cent after raising its dividend by 25 per cent, joining other companies boosting their payouts ahead of an expected tax-rate increase next year.

Jeweller Tiffany had tumbled 7.6 per cent by lunchtime after cutting its forecast. – (Additional reporting, Bloomberg)