European shares rally as concerns over China ease

European shares rose yesterday but ended off their highs after profit-taking by investors and after a rise in US crude oil inventories added to concerns about a deepening supply glut.

Better than expected trade data from China had improved market sentiment earlier in the session, pushing oil and metals prices higher and lifting investors' appetite for shares in mining, oil and gas companies. The FTSE 100, which is heavily weighted with mining stocks, was the main beneficiary.

Data from China overnight showed total trade in December fell much less than expected after the country let the yuan currency depreciate sharply.

DUBLIN

The Iseq index finished down 0.3 per cent, having traded higher earlier in the session. There were mixed fortunes for its two biggest stocks, building materials group CRH, which closed up 0.4 per cent at €24.87, and Ryanair, which ended the day at €15.10, or more than 1 per cent lower on Tuesday's closing price.

Paper and packaging group Smurfit Kappa declined 2.1 per cent to €23.34, while food company Glanbia climbed 2.4 per cent to €17.69.

On the ESM, AIB lost more than 8 per cent, a repeat of its performance on Tuesday, and closed at €5.60. There were thin volumes in the stock.

Dalata Hotel Group posted a 3.7 per cent gain to €5.34. Analysts at Davy Research said the company should continue to benefit from a shortage of hotel rooms in Dublin.

LONDON

Shares listed in London rose following the brighter than anticipated trade data from China. The price of copper, of which China is a major consumer, rebounded off the lowest point in almost six years, with mining stocks

Anglo American

,

Glencore

and

Rio Tinto

all gaining about 4 per cent.

The FTSE 100 rose for the second day and was up more than 0.5 per cent at the end of the session, as some buyers evidently decided that concern over China’s economy had been overblown. The index remains down more than 16 per cent from last April’s record high.

Shire was also among the top risers, with the pharmaceutical group up 3.8 per cent after its chief executive said it could achieve much higher cost-savings from its planned $32 billion acquisition of Baxalta than previously expected.

Sainsbury's dropped 1.4 per cent after a trading statement. Although its quarterly figures were solid, it had rallied with the sector on Tuesday, and some elements of the report underwhelmed.

EUROPE

The pan-European FTSEurofirst 300 index rose 0.4 per cent but was lower than its session high. In Germany, the Dax underperformed, closing down 0.25 per cent, while France’s Cac 40 posted a 0.3 per cent gain. Auto stocks were the biggest losers with a decline of 1.2 per cent.

Dutch insurer Aegon held on to solid gains to end up 9.7 per cent, making it the biggest gainer in the FTSEurofirst 300. Among standout gainers, French catering services giant Sodexo rose 2.7 per cent after it posted revenue growth of 4.7 per cent in the quarter.

NEW YORK

US stocks tumbled, with the Dow Jones Industrial Average plunging more than 370 points and small caps entering a bear market as oil’s failure to maintain a 4 per cent rally rekindled a flight from risk assets.

Treasuries surged amid signs that demand for the relative safety of bonds is rising. The yield on the 10-year Treasury note fell to 2.04 percent, andg old traded above $1,090 an ounce.

Shares in consumer discretionary shares plunged 3.4 percent with losses heaviest in Amazon. com (down 8.4 per cent). and Netflix (down 8.59 per cent).

Healthcare shares sank 2.9 per cent.

General Motors rose 0.6 per cent, while Ford slipped 2.2 per cent after the automakers gave contrasting profit forecasts for the year.

– (Additional reporting: Bloomberg and Reuters)