Values rise on US and German data

EUROPEAN SHARES rose to their highest levels since last July as encouraging data from Germany and the United States signalled a recovery in the global economy.

Bank and technology shares led the SP 500 index and Nasdaq higher as US retail sales exceeded expectations last month and concerns eased about the euro zone debt crisis as final approval was given to the second Greek bailout.

DUBLIN

IRISH STOCKS performed strongly, rising in line with European markets, despite another light day for trading on the exchange.

The Iseq index rose 1.8 per cent as insurer FBD, United Drug and DCC led the market’s gains.

FBD rose 5 per cent or 43 cent, breaking through the €9 mark, to €9.05 a share as the company presents last week’s strong results to investors on the road and on the back of strong performances reported by UK insurers.

United Drug gained 4.8 per cent or 10 cent to €2.20 a share, while industrial holdings group DCC added 4.3 per cent or 82 cent to €19.95 a share in a move that one trader put down to short covering.

Aer Lingus rose 3.3 per cent or 3 cent to 93 cent a share.

Paddy Power enjoyed a good trading session, rising 2.4 per cent or €1.09 cent to €46.54 a share on the first day of the Cheltenham racing festival. A trader said that the market always assumes that the bookie is always going to win.

The Iseq published updates to the free floats of companies, which are the proportion of a companys shares that can be publicly purchased. The free floats of 19 companies will increase, while there will be decreases in nine stocks, with 21 remaining the same.

The biggest change is at the packaging giant Smurfit Kappa where the free float will increase to 75 per cent from 65 per cent following the placing of a 10 per cent stake. Independent News and Media will join the Iseq small-cap index and AIB will exit the index.

The changes will come into effect at the opening of the markets next Monday.

LONDON

THE FTSE 100 closed at its highest level this year as banks and mining companies rallied on the back of the strong economic data, although volumes are weak and traders warned that the market may reaching its peak.

London’s blue chip index closed up 63.16 points, or 1.1 per cent at 5,955, but volumes were thin with the FTSE 100 trading 83 per cent of a subdued 90-day average.

The appetite of investors was given a boost by German ZEW sentiment data which beat expectations by a large margin and US retail sales posted their largest gain in five months in February.

Part nationalised British banks Lloyds and Royal Bank of Scotland rose 2.8 and 1.5 per cent respectively after they announced 1,900 job cuts as the banks streamline operations to improve profitability following the crisis.

UK trade figures, revealing a strong boost to exports in January, strengthened the pound which rose to 1.57 against the US dollar and 1.19 against the euro.

Insurers Standard Life and Prudential were on the front foot after their full-year results got a positive response from investors.

EUROPE

THE NATIONAL benchmark indexes rose in all 19 western European markets. The CAC 40 in France gained 1.7 per cent and Germany’s DAX increased almost 1.4 per cent.

German investor confidence rose more than forecast in March after the European Central Bank flooded financial markets with cash and the sovereign debt crisis showed signs of abating.

European Central Bank council member Jens Weidmann said that policymakers are already discussing ways to withdraw some of the emergency cash they injected into the banking system to fight the sovereign debt crisis.

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, advanced to 22.3 from 5.4 in February, the fourth straight increase

Deutsche Bank and Commerzbank, the biggest German lenders, rose 3.5 per cent and 5.1 per cent, respectively, as financial stocks climbed in Frankfurt. Munich Re, the world’s biggest reinsurer, gained 2.6 per cent after saying it plans to triple profit this year on higher investment income.

NEW YORK

DATA IN the US indicated a slowly improving domestic economy, as retail sales recorded their largest gain in five months in February despite rising gasoline prices.

The strong figures fuelled Wall Street gains, where the Dow Jones industrial average is trading at a near four-year high.

The US Federal Reserve said the economy was “expanding moderately,” though growth still faced significant downside risks. The assessment was unchanged from the Fed’s January statement. Equities rose slightly after the comments. This year’s advance in the SP 500 extended to 10 per cent. – Additional reporting Bloomberg and Reuters