European stocks lower on thin trades

EUROPEAN STOCKS ended slightly lower yesterday in extremely thin trading volumes, with US equity markets closed for the Independence Day holiday.

Activity on the markets was subdued as investors took a breather ahead of the European Central Bank policy meeting today.

ECB officials are expected to cut the benchmark rate below 1 per cent to a record low of 0.75 per cent and to reduce the deposit rate to zero.

DUBLIN

THE ISEQ index of Irish shares was up 0.9 per cent to close at 3,218.39.

There were gains for Abbey, up 5.08 per cent, Elan, up 4.7 per cent and First Derivatives, up 13.11 per cent. Index heavyweight CRH finished on a positive note, holding on to its gains of recent days. The day wasn’t so good for the banks though, with Bank of Ireland, AIB and Permanent TSB all declining.

Exploration group Providence Resources and building materials group Grafton also lost out, falling 2.09 per cent and 2.03 per cent respectively.

LONDON

UK STOCKS closed little changed after the benchmark FTSE 100 Index rallied to a two-month high on Tuesday, as investors awaited the outcome of today’s central bank policy meetings.

Barclays paced banks lower as former chief executive officer Bob Diamond attended a Treasury Select Committee hearing. The shares earlier fell as much as 2.1 per cent as Mr Diamond, who resigned on Tuesday, faced questions from lawmakers on how the bank failed to prevent the abuse of a benchmark used to set interest payments on $500 trillion of securities from mortgages to swaps. Lloyds Banking Group and HSBC Holdings both declined 0.5 per cent.

Man Group slid 4.4 per cent after the hedge-fund manager reported a decrease in assets last week at its flagship fund. Tullow Oil retreated 2.1 per cent after the oil producer suspended drilling at a well in Kenya.

Carillion plc led construction-related companies lower, falling 3.2 per cent to 273.1 pence even as the builder of the London Olympics media centre said it was on track to meet full-year earnings expectations. The shares had climbed 4.9 per cent in the past three days. Taylor Wimpey plc dropped 2.6 per cent to £47.98 after giving a first-half financial update. Britain’s second-largest homebuilder by volume posted an 8 per cent increase in UK house sales and a 2.6 percentage-point increase in its operating margin. The stock had climbed 8.8 per cent in the past three sessions.

The FTSE 100 slid 3.26, less than 0.1 per cent, to 5,684.47 at the close in London. The volume of shares changing hands on the gauge was 50 per cent below the 30-day average, with the US closed for the Independence Day holiday.

EUROPE

EUROPEAN STOCKS were little changed as speculation that central banks will ease monetary policy offset service-industry measures in the UK and Germany that missed economists’ forecasts.

Iberdrola SA tumbled 5.8 per cent as utilities dropped. CHR Hansen, the maker of natural food colours and cheese cultures, climbed 12 per cent after reporting earnings that exceeded estimates. Societe Television Francaise 1 advanced after UBS AG advised buying the shares. France’s CAC 40 lost 0.1 per cent.

German stocks fell for the first day in four, pulling the DAX Index down from the highest level in almost two months. EON AG dropped 1.6 per cent after JPMorgan Chase and Citigroup cut their recommendations on the shares. Linde AG fell 1.3 per cent after Credit Suisse Group AG lowered its rating on the stock. Deutsche Bank AG and Commerzbank AG, Germany’s biggest lenders, retreated at least 1 per cent each. The DAX Index fell 0.2 per cent to 6,564.80 at the close in Frankfurt.

The Stoxx Europe 600 Index slipped after rallying 5.2 per cent over the previous three days. The gauge is in line for a fifth straight week of gains, the longest stretch since January, as EU leaders agreed to address flaws in their bailout programmes and speculation grew that central banks will move to boost the economy.

ASIA

ASIAN STOCKS rose, led by consumer companies, after automakers beat estimates for US sales. Hyundai, South Korea’s biggest carmaker, climbed the most in two weeks as it sold more cars in the US. Hyundai jumped 1.7 per cent in Seoul, the most since June 19th. Hyundai and its affiliate Kia combined to sell 10 per cent more vehicles in the US in June than a year earlier, exceeding the 9.8 per cent increase that was the average of six analysts’ estimates.

Indian stocks advanced on speculation central banks in the world’s largest economies will ease monetary policy to spur growth. Sterlite Industries (India), the largest copper and zinc maker, surged to a three-month high, pacing gains among its peers. Maruti Suzuki India, the biggest carmaker, rose for the fourth day. – (Additional reporting: Bloomberg)