Dow Jones: 12,019.42 (-0.01%) Nasdaq: 2,626.93 (+0.03%) SP 500: 1,244.28 (-0.02%)EUROPEAN EQUITY markets delivered their biggest weekly rally in three years on hopes of a bold solution to the euro zone debt crisis at a summit next week, coupled with an unexpected fall in US unemployment.
The Stoxx Europe 600 index jumped 8.7 per cent to 240.73, its largest weekly advance since November 2008, while markets in Germany and France soared 11 per cent over the week.
Banking stocks continued to lead the gains yesterday, with the sector gaining between 4 and 8 per cent across Europe and the US.
DUBLIN
THE ISEQ index lagged its European counterparts, closing just 0.4 per cent higher yesterday.
Bank of Ireland, the only banking stock still listed on the main Irish exchange, was back in favour after losing ground on Thursday. Its share price jumped about 8.5 per cent to 8.9 cent after the bank announced it had raised about €350 million from a tender offer to buy back residential mortgage securities.
DIY group Grafton gained as much as 4.5 per cent at one point on the back of bid rumours surrounding its UK peer Home Retail.
Although Grafton came back slightly over the afternoon, it was still almost 3 per cent, or seven cent, ahead at €2.51.
Low-fares airline Ryanair traded on strong volume, but finished almost 3 per cent down, or 11.5 cent, at just under €3.68. Brokers said an element of profit-taking was probably at play.
LONDON
UK STOCKS advanced, with the benchmark FTSE 100 index posting the biggest weekly increase since January 2009.
Banks and commodity companies were the top gainers.
Royal Bank of Scotland rose 5.3 per cent to 21.63p after announcing it sold its pub business, Galaxy Pub Estate, to Scottish Newcastle Pub, a subsidiary of Heineken, for £412 million (€480 million).
Amec rose 6.9 per cent to 943p and Petrofac rose 1.7 per cent to 1,456p after Nomura recommended buying the shares of the UK oil-services companies.
Lloyds Banking Group, Britain’s second-biggest government-owned lender, rose 5.8 per cent to 25.39p, while Barclays advanced 7.6 per cent to 190.65p.
Commodity stocks rallied as copper, lead, nickel and zinc rose on the London Metal Exchange. BHP Billiton, the world’s biggest mining company, advanced 4 per cent to 2,000.5p.
Home Retail jumped 8.9 per cent to 98.4p, the largest increase in nine months and the seventh day of gains for the longest rising streak in five years.
CVC and Bridgepoint are working on a deal that would value the owner of the Argos chain at a significant premium to its market price, according to media reports.
EUROPE
NATIONAL BENCHMARK indices climbed in every western European market except Norway yesterday.
France’s CAC 40 advanced 1.1 per cent and Germany’s DAX index increased 0.7 per cent.
Commerzbank surged 11 per cent to €1.50 as Die Weltnewspaper said Germany's second-biggest bank could generate about €1 billion by retaining profit through to June 30th.
The lender could boost its core capital by €3 billion by offloading some €30 billion in risk-weighted assets, the newspaper said.
BNP Paribas surged 9.4 per cent to €31.60 in Paris.
US
US STOCKS ended flat but capped the best week for Wall Street bulls in almost three years after data showed the US unemployment rate dropped to a 2½-year low.
The market gave back a 1 per cent gain earlier in the session as traders booked profits after the S&P 500 failed to break through technical resistance near its 200-day moving average.
The retreat also came on caution before key events in Europe next week, including the EU summit aimed at solving the two-year-old debt crisis in the euro zone.
While traders were heartened by the drop in the unemployment rate, they were aware of Europe’s ability to disappoint investors, especially after a more than 7 per cent gain in the S&P 500 this week.
Recent US economic data has boosted sentiment. US firms stepped up hiring and the jobless rate fell to 8.6 per cent from 9 per cent, further evidence the recovery was gaining momentum.
Financial shares were the biggest gainers on the day with the S&P financial index up 1.4 per cent. JPMorgan Chase gained 6.1 per cent to $32.33.
For the week, the Dow rose 7 per cent, the S&P 500 added 7.4 per cent and the Nasdaq rose 7.6 per cent. It was their largest weekly percentage advance since mid-March 2009.
US-listed shares of Research in Motion dropped 9.7 per cent to $16.77 after the BlackBerry maker said it would write down the value of its poorly received PlayBook tablet computer. – (Additional reporting: Bloomberg, Reuters)
