Global equities advance on growth in China

Global equity markets advanced broadly yesterday after China reported growth that beat expectations, providing relief to investors worried about the Chinese economy, while the dollar slid on the growing view the Federal Reserve will keep interest rates lower than normal for a few years.

DUBLIN
In Dublin, where another real estate investment trust – the Irish Residential Property REIT – joined the market after a €200 million fundraising, the market advanced 1.54 per cent on the day, with much of the gain driven by financials.

LONDON
Britain's benchmark stock index rose with Tesco rising on aggressive strategy plans and Sports Direct surging on a bullish note about the company. The sportswear retailer surged 5.6 per cent to the lead FTSE 100 gainers.

Traders cited a note from Bank of America Merrill Lynch as saying it could grow its top line at a compound annual growth rate of 7 per cent over the next 10 years, driven by online sales and expansion into Europe.

The market was broadly helped by data showing China’s economy grew 7.4 per cent in the January-March quarter from a year earlier, just above a forecast of 7.3 per cent.

March data showed retail sales were a shade above forecasts with an annual rise of 12.2 per cent.

Pharmaceutical shares, generally seen as defensive plays, added the most points to the blue-chip FTSE 100 index, with GlaxoSmithKline, AstraZeneca and Shire rising 1 to 1.6 per cent.

The FTSE index closed 0.7 per cent higher at 6,584.17 points, after falling 0.6 per cent on Tuesday, on relief that Chinese growth was steadier than some had feared.

Tesco , which is heavily weighted in the FTSE 100, rose 2.6 per cent after posting in-line results and its chief executive Philip Clarke said he would respond to both the discount groups and the upmarket grocers that have hit Tesco sales.
EUROPE
European shares reversed the previous session's slide, with the Chinese data again a significant driver. At the close, the pan-European FTSEurofirst 300 index was up 1.2 per cent at 1,322.51 points, in a rebound most traders saw as a reaction to a 1 per cent fall in the previous session.

French utility Suez Environment surged 7.1 per cent, the top FTSEurofirst gainer, while Veolia Environment gained 4.3 per cent, boosted by merger speculation. The companies after the close denied they were in talks on a merger or even studying such a project.

Germany’s DAX was up 1.6 per cent and France’s CAC 40 ahead 1.4 per cent, while Italy’s FTSE MIB added 3.4 per cent, recouping all of last session’s losses. European stocks have seen an improvement in volumes traded so far in 2014, with European equities seeing a 27 per cent increase in volume in the first quarter compared to the same period last year.

Shares in ASML , the world's biggest manufacturer of tools for semiconductor chip makers, fell 5.2 per cent after it trimmed its first-half sales forecast, blaming slower second-quarter sales to some customers.

Credit Suisse lost 1.5 per cent after first-quarter net profit fell by more than a third as revenue from bond trading tumbled, raising question marks over its investment banking strategy.

NEW YORK
US stocks rose for a third straight session on the better-than-expected figures from China and a second consecutive month of growth for US industrial production.

Federal Reserve chair Janet Yellen, speaking in New York, provided further support, re-affirming the Fed's commitment to keep interest rates low, even after ending its bond buying program, as long as inflation remains under target and unemployment elevated.

Rising US manufacturing output was taken as a sign of recovery from a harsh and prolonged winter that had put a damper on activity. – ( Reuters / Bloomberg )