Markets rally on support for US Federal Reserve bond-buying programme

European markets made healthy gains yesterday after Atlanta Federal Reserve president Dennis Lockhart said the US central bank was committed to its economic stimulus programme. The comments boosted markets as Mr Lockhart added that the country's economy was not strong enough to justify a reduction in stimulus measures ahead of key economic indicators to be published today.

DUBLIN
The Iseq closed up 0.48 per cent following positive momentum across European stock markets.

Ryanair made some of the biggest gains, adding 2.5 per cent to €7.02 following strong airline traffic figures and notice of share buy-backs overnight.

Paper and packaging group Smurfit Kappa shed 3.9 per cent to €12.40 as the stock played catch-up with losses made on the UK market in Monday trade when the Irish market was closed.

Kerry Group made gains, up 0.7 per cent to €44.00. The food company makes up a large part of the Iseq index, with an 11.4 per cent weighting, meaning a positive movement in the stock can help push up the overall index.

Building materials supplier CRH closed flat, slipping 0.06 per cent, to €16.29, and Bank of Ireland lost 1.08 per cent to 0.183 cent.

LONDON
UK stocks rebounded yesterday amid signs of continued support for the US Federal Reserve's bond-buying programme from Fed officials.

The FTSE 100 index added 33.46 points, or 0.51 per cent, to 6,558.58 points after the market declined on Monday to its lowest level in over a month amid speculation the Federal Reserve would start to reduce its bond-buying programme if the economy improved.

Rentokil Initial rose 2.6 per cent to 90.8 pence after a report that private-equity investor Clayton Dubilier and Rice is considering combining the company's office-maintenance unit with that of Balfour Beatty.

Defence and aerospace equipment maker Cobham dropped 4.6 per cent to 273 pence as a shareholder sold a 3.6 per cent stake in the firm.

Engineering group GKN rallied 5.1 per cent to 313.4 pence as UBS raised its price estimate on the stock to 350 pence from 275 pence.

HSBC advanced 1.9 per cent to 731.9 pence. Goldman Sachs reiterated its "conviction buy" rating for the bank.

EUROPE
European stock markets made gains, taking cues from better than expected Spanish unemployment figures.

Santander, Spain's biggest lender, increased 1.5 per cent to €5.58. Inditex, the world's largest clothing retailer, added 0.7 per cent to €97.92.

Generali, Italy's biggest insurer, advanced 1.2 per cent to €14.51 after Scor said it will pay about €579 million plus an "earnings adjustment" for Generali USA Life Reassurance. Scor, France's largest reinsurer, rose 2.7 per cent to €22.86.

Nestlé the world's biggest food producer, climbed 3.2 per cent to 63.95 Swiss francs.

Société Générale, France's second largest bank, advanced 1.4 per cent to €31.03 as analysts at Goldman Sachs recommended investors buy the shares, citing the firm's improved funding levels.

NEW YORK
US markets were more subdued than their European counterparts as investors paused ahead of a flurry of US data.

Web-based software maker Salesforce.com said it would buy marketing software provider ExactTarget for $2.5 billion. Salesforce.com shares lost 2.8 per cent to $39.90, while ExactTarget shares surged 52.5 per cent to $33.70.

US regulators proposed designating American International Group, Prudential Financial and GE Capital for heightened regulatory oversight in a long-anticipated move aimed at cracking down on risks to markets. Prudential shares gained 0.5 per cent to $69.95 and GE dipped 0.3 per cent to $23.58. – (Additional Reporting - Bloomberg/Reuters)