Markets edge up on earnings boost in US

Stocks edged upwards or stayed flat yesterday as US lawmakers agreed on a compromise budget and US companies reported better-than-projected earnings

DUBLIN

The Irish market took a little step back, giving up 8.32 points to close down at 3,479.00.

There was heavy trading in Bank of Ireland, with about 500 million shares traded in both Dublin and London, but it fell back off its recent highs, closing down just below the €0.14 level.

Ryanair gave up 3 cent yesterday, falling back by 0.5 per cent to €5.26, following market speculation that it might be closing in on a new aircraft deal with Boeing. However, the airline asserted yesterday evening that “there is no aircraft order imminent and none that is expected until perhaps the end of calendar 2013 or early 2014, at the earliest”.

Following the sale of 7 million shares in Smurfit Kappa by venture capital fund Cinven, the paper and packaging firm continued its good run, adding 19 cent, or 1.9 per cent, to advance to €10.19.

While there was good volumes in Kerry Group, the stock was a little weaker, giving up 3 cent, or almost 0.1 per cent, to close down at €38.08.

LONDON

UK stocks climbed, extending the FTSE 100 index’s highest level since May 2008, as unemployment unexpectedly fell and prime minister David Cameron pledged to hold a referendum on the UK leaving the EU. The benchmark FTSE 100 index added 18.47 points, or 0.3 per cent, to 6,197.64 at the close.

Unilever rose 3.06 per cent to 2526 pence in London, the highest price since at least September 1988. The world’s second biggest consumer-goods company posted fourth-quarter underlying sales growth of 7.8 per cent, exceeding the average analyst estimate calling for an increase of 6.2 per cent.

BHP Billiton advanced 1.4 per cent to 2,110 pence after the company forecast 10 per cent annual output growth through its fiscal year ending in 2014. The world’s largest mining company said iron ore, copper and petroleum production increased in the final three months of last year. Tullow Oil gained 3.5 per cent to 1,195 pence.

EUROPE

European stocks advanced, after remaining little changed for most of the day, as the US House of Representatives gathered to vote on suspending the country’s debt limit and as results from Novartis to Unilever beat analyst estimates.

“The earnings season in Europe is not in full swing yet, so this is a cautionary pause in the markets,” said Manish Singh, head of investment at Crossbridge Capital in London.

“With the debt ceiling on the verge of extension for three months, markets ought to be more positive.”

Novartis advanced by 4.1 per cent to 62.55 Swiss francs, the highest price since August 2008.

In the bond markets, Portugal’s first debt sale since its 2011 rescue drew strong demand, bolstering hopes the country can make a full market return that should allow it to call on further ECB support.

Lisbon was initially expected to sell around €2 billion of the five-year paper, a reopening of its 4.35 per cent October 2017 bond, first launched in 2007 as a 10-year benchmark.

But sources close to the deal said the placement was likely to be around €2.5 billion after orders had exceeded €10 billion.

US

The Dow and Nasdaq edged higher , lifted by IBM and Google whose stronger-than-expected profits helped to soothe investors’ concerns.

IBM forecast better-than-anticipated 2013 results and also posted fourth-quarter earnings and revenue that beat expectations. Shares climbed 5.5 per cent to $206.87, its biggest advance since July. Also helping to boost the tech sector was a 6.1 per cent jump in internet search company Google to $746.02. – (Additional reporting: Bloomberg/Reuters)