Eurostoxx 50:2,299.15 (+0.02%) Frankfurt DAX:6,034.18 (-0.39%) Paris CAC:3,138.63 (+0.04%)
THE ISEQ index yesterday outperformed major European markets, which retreated after a meeting between German chancellor Angela Merkel and French president Nicolas Sarkozy failed to sooth investor jitters.
One Dublin broker reported some “to-ing and fro-ing” across European bourses yesterday, as the “dark cloud” of the euro crisis continued to loom over markets. However, yesterday’s movements were relatively muted compared with the sharp swings seen across equity markets in recent months.
DUBLIN
The Irish market bucked the trend, gaining 1.45 per cent, which brokers attributed to New Year optimism amongst investors.
Strong gains in Elan’s US line on Friday spilled over into its Irish line yesterday, pushing the drug manufacturer almost 5 per cent higher, or 48 cent, to €10.83.
The main newsflow was provided by AGI Therapeutics when it emerged that the Dublin-based pharmaceuticals firm is being sold for €6.6 million. Its share price soared by more than 50 per cent on the back of this news. However, the stock is trading at such low levels that this equated to an increase of just three cent.
Cider manufacturer CC also delivered a strong performance, rising more than 2 per cent, or seven cent, to €3.00.
LONDON
British shares retreated, with the FTSE 100 Index dropping 37.4 points at 5612.3, as renewed nerves around the euro zone hit the banking sector.
Royal Bank of Scotland fell 2 per cent, or 0.4p to 20.1p, Barclays dropped 4 per cent or 8.3p to 178.1p, Lloyds Banking Group was off 0.9p at 26.2p and HSBC shed 6.8p to 491.4p.
Retail stocks proved largely resilient despite fresh gloom for the sector after supermarket chain Morrisons revealed lacklustre underlying sales growth of 0.7 per cent over the key Christmas trading period.
This represented a slowdown on its stellar form of late, but its shares still rose 0.2p to 311.5p following early falls.
It was a mixed picture for rivals Tesco and Sainsbury’s, who are also due to update the market this week. Sainsbury’s made slight gains of 1.2p to 300p but Tesco fell 0.5p to 390.5p, amid expectations it will post one of its weakest Christmas trading updates in several years.
Marks Spencer was also among the fallers, down 2.2p at 308.5p.
In the FTSE 250 Index, shares in JD Sports Fashion jumped 6 per cent after it confirmed a deal to buy the bulk of ailing retailer Blacks Leisure including its 290 stores.
EUROPE
European stocks fell, trimming three weeks of gains for the Stoxx Europe 600 Index, as talks between the European leaders failed to assuage concern over the debt crisis.
UniCredit tumbled as rights to buy the bank’s shares slumped in their first day of trading in Milan. GlaxoSmithKline fell 4.1 per cent after saying its experimental respiratory drug Relovair failed to prove its superiority to an existing medicine in a late-stage study. Nokia Oyj fell 2.8 per cent as supplier RF Micro Devices reported preliminary quarterly revenue that trailed its earlier forecast.
The Stoxx 600 slipped 0.5 per cent to 246.42 at the close of trading, having swung between gains and losses more than 10 times today. The gauge gained 1.2 per cent last week as economic reports from around the world added to optimism that the global economy can weather the fallout from the euro area’s sovereign-debt crisis.
“We believe that a combination of weaker earnings numbers, a further deterioration in euro zone growth in the first quarter, and further political tensions are likely to push equities down before they recover more sustainably, most likely later in the first half,” a team of strategists at Goldman Sachs Group wrote in a report.
“There remain several issues in Europe that are likely to put upward pressure on sovereign yields over the next couple of months that are also likely to weigh on equities.”
US
US stocks advanced, after last week’s rally for the Standard and Poor’s 500 Index, as investors awaited the start of the fourth-quarter earnings season.
Alcoa increased 2.3 per cent as it becomes the first company in the Dow Jones Industrial Average to report quarterly results after the market close.
Broadcom rallied 2.3 per cent after Deutsche Bank said soft fourth-quarter results for chipmakers create a buying opportunity for the shares.
Costco Wholesale lost 2.4 per cent after Sanford C Bernstein and Co cut its rating for the warehouse-club chain.
Stocks swung between gains and losses as German Chancellor Angela Merkel and French President Nicolas Sarkozy sought to craft a plan for rescuing the euro over the next three months.
Additional reporting – PA and Bloomberg
