IT WAS another good day on markets yesterday, as investors welcomed Italian Prime Minister Mario Monti’s proposed budget cuts and the leaders of France and Germany called for a tougher European treaty in a bid to save the euro.
Markets rose across all western European countries, while borrowing costs for Italy reached a one-month low, and Spanish bond yields are now approaching pre-crisis levels.
DUBLIN
The Dublin market outperformed its European peers yesterday, advancing by 1.7 per cent.
The main news on the day was the collapse of possible takeover talks for food group Greencore. On the back of the news the stock reacted quite negatively, giving up 7 cent, or 10.6 per cent, to close down at €0.64
Despite both Michael O’Leary and James Osborne disposing of shares on Friday evening, Ryanair enjoyed a bounce yesterday, gaining 15 cent, or 4 per cent, to close up at €3.82.
Smurfit Kappa was also strong on the day. It added 21 cent, or 4.4 per cent to advance to €4.86, while CRH added 12 cent, or 0.8 per cent, to finish the day up at €14.30.
Kingspan was a surprise performer on the day, advancing by as much as almost 8 per cent at one stage, albeit on light volumes.
It closed up by 28 cent, or 4.3 per cent, at € 6.78.
Independent News & Media enjoyed a good day, gaining 2 cent, or 9.9 per cent, to close at € 0.23. However, according to brokers, this was on very light volume.
Kerry was also strong in the morning, but it gave up some of its gains in the afternoon. It closed up by 44 cent, or 1.6 per cent, at €27.41.
LONDON
The UKs FTSE 100 Index rose yesterday, up by 0.3 per cent. The banking sector was the key beneficiary of the improved sentiment with Lloyds Banking Group up 6 per cent at 27p; Barclays ahead a penny at 191.65p; and Royal Bank of Scotland advancing by 1.1p at 22.8p.
Despite being fined £10.5 million by the Financial Services Authority, HSBC advanced by 7.3p to 518p.
The biggest fallers were Burberry, down 44p at 1272p; Next off 57p at 2660p; Weir down 39p at 2035p; and Arm Holdings off 11p at 589.5p.
EUROPE
Across Europe, markets rose to a five-week closing high, after French president Nicolas Sarkozy and German chancellor Angela Merkel agreed on a range of measures to help resolve the euro zone debt crisis.
“There’s some reassurance in the statement.
They’re talking about treaty change by March. They’re moving in the right direction.
And weve seen some short covering,” said Ian King head of international equities at Legal General.
The FTSEurofirst 300 index of top European shares rose by 0.9 per cent to reach its highest close since October 31st, while the Stoxx 600 extended its biggest weekly rally since November 2008.
France’s CAC 40 Index advancing by 1.2 per cent and Germanys DAX Index up by 0.4 per cent.
UniCredit, Italy’s biggest lender, jumped by 5.4 per cent to €83.6; Intesa Sanpaolo added 3.9 per cent to climb to €1.35; and BNP Paribas, Frances largest bank, rose 4.9 per cent to €33.16.
US
After its best week in almost three years, the S&P 500 advanced again in early trading yesterday.
It was up by 1.6 per cent to 1,264.25 at lunch time yesterday. The Dow Jones Industrial Average climbed by 138.12 points, or 1.2 per cent, to 12,157.54.
Bank of America added 5.1 per cent to advance to $5.93; JPMorgan increased by 4.7 per cent to $33.86; and Citigroup jumped by 6.6 per cent to $30.02.
US markets remain hopeful that European policymakers will finally resolve the Eurozone crisis.
Marc Pado, US market strategist at Cantor Fitzgerald in San Francisco said stocks could rally into the end of the year if a convincing deal is reached in Europe, but he cautioned against too much optimism too soon.
Markets have rallied into a hoped-for euro zone deal before, only to be let down.
“We are far from an easy consensus that it’s a done deal,” he said.
“But we are further along in the negotiations than we’ve been and we are focused on the right things now.”
The pace of growth in the vast US services sector slowed more than expected in November, according to the Institute for Supply Management, dropping to the lowest level since January 2010.
MetLife rose 5.2 per cent to $33.41 after the the largest US insurer forecast 2012 earnings growth of as much as 7 per cent, though its fourth-quarter outlook was below expectations. – (Additional reporting: Bloomberg, Press Association, Reuters)
