Values static ahead of ECB meeting

EUROPEAN STOCKS held steady yesterday, albeit at close to one-month lows, as investors avoided big bets ahead of today’s meeting of the European Central Bank.

There were some investor nerves ahead of the ECB meeting, with the bank under increasing pressure to take new steps to fight the euro zone’s sovereign debt crisis, weighing on markets. Some analysts took the view that the ECB might announce a bond-buying plan today, but only offer limited details.

Analysts said the market was cautiously positioned for a series of critical events, including a ruling by Germany’s Constitutional Court on September 12th on whether the euro zone’s bailout fund is compatible with German law.

DUBLIN

THE IRISH market closed up 0.6 per cent, with most of the major stocks finishing higher.

Iseq heavyweights CRH and Ryanair both posted gains, with the cement-maker advancing 1.55 per cent to €14.05 and the airline rising 2.1 per cent to €4.25. Bookmaker Paddy Power also joined in the positive sentiment, closing up 1.2 per cent at €56.40.

Oil and gas explorer Providence Resources advanced 3.8 per cent to €8.15 after it released new drilling estimates at its Ballyroe project.

Among the fallers, DIY chain owners and builders’ merchants Grafton fell 2.2 per cent to €3.15.

Paper and packaging group Smurfit Kappa, which climbed 1 cent to €6.71, announced that it had completed the pricing of a €440 million offering of senior bonds.

LONDON

BRITAIN’S BENCHMARK share index, the FTSE 100, fell to its lowest level in more than a month, underperforming gains on other major European stock markets, as BP slumped after the 2010 Gulf of Mexico oil spill returned to haunt the energy company.

The blue-chip FTSE 100 index ended down 0.3 per cent, or 14.15 points lower, at 5,657.86 points. It finished at its lowest closing level since ending at 5,635.28 points on July 31st.

With the US justice department ramping up its rhetoric against BP, the oil company fell 2.9 per cent to 423.85 pence and stripped 9.5 points off the stock market.

Britvic surged 13 per cent to 369.9 pence. The maker of Robinsons Barley Water said it has been approached by AG Barr about an all-share merger and has started talks to create one of Europe’s biggest soft-drink businesses. AG Barr’s shares climbed 8.3 per cent to 450.2 pence.

Imperial Tobacco, which owns the Gauloises brand, retreated 1.8 per cent to 2,406 pence after Le Parisien said French health minister Marisol Touraine would announce an initiative in the coming weeks to remove branding labels from cigarette packs and would increase the price by 40 cents per packet from October 1st.

Lonmin dropped 6.2 per cent to 529.5 pence. About 3,000 South African protesters marched to Lonmin’s Marikana mine where police shot dead 34 people last month during a strike at the third-largest platinum company.

EUROPE

EUROPEAN SHARES steadied at the close, in sight of earlier one-month lows.

Shares rebounded in choppy afternoon trade after a media report said the ECB planned to buy unlimited amounts of short-term debt to ease the region’s financial crisis. The euro rose alongside European equities, while Spanish and Italian bonds yields fell. Caution however soon returned to the market.

The FTSEurofirst 300 index of top European shares ended flat at 1,079.24 points after touching 1,074.05 – the lowest since early August – earlier in the session.

Germany’s DAX rose 0.5 per cent as low demand at a German Bund auction signalled that investor appetite for safe-haven assets was drying up, a positive sign for equities.

Among individual stocks, Nokia was the standout performer for all the wrong reasons, slumping 13 per cent to €1.99 after analysts gave a muted reaction to the new Lumia smartphone showcased by the Finnish company and Microsoft in New York.

US

STOCKS FLUCTUATED between gains and losses in New York as positive momentum from ECB-related speculation and a good performance by airline stocks offset a slump in FedEx and disappointing global economic data.

FedEx, a barometer for the economy because it delivers goods from mobile phones to pharmaceuticals, slid 1.2 per cent after projecting its first decline in quarterly earnings in almost three years.

Facebook jumped 4.9 per cent after chief executive Mark Zuckerberg said he would not start selling his holdings for at least a year.

Mr Zuckerberg, faced with a plummeting stock price and deluge of shares hitting the market, has yet to adopt a share sale plan, the company said on Tuesday in a filing with the Securities and Exchange Commission. – (Additional reporting: Bloomberg/ Reuters.)