Bank stocks lead way as oil companies fall further on price fears

Mark Paul

The Iseq in Dublin rose by 0.3 per cent as European stocks advanced for a fifth day, with banks contributing the most to the gains.

Most US stocks rose, after the biggest three-day rally since 2011, as gains in technology shares offset losses among drugmakers.

Benchmark stock gauges of Germany, Austria and the Netherlands rallied more than 0.7 per cent, the most among 18 western-European markets.

Britain’s blue-chip FTSE 100 index advanced by 0.5 per cent, France’s CAC rose 0.3 per cent while the pan-European FTSEurofirst 300 index climbed 0.4 per cent.

DUBLIN

Aer Lingus soared through the €2 barrier, ending the day up more than 8 per cent at €2.14 on the back of about 730 trades, which was heavy on an overall quiet day of trading for Dublin. Investors are weighing up the possibility that British Airways owner IAG will return with a higher offer for the former flag carrier. Crystal Amber, one of Aer Lingus' biggest shareholders, was reported in the British media as saying that it supported the Irish airline's initial rejection of IAG's offer but would welcome a higher bid.

Providence Resources rose by almost 9 per cent after receiving a favourable court ruling in London. A High Court judge ruled it does not owe the amount of $19 million being claimed against it by Transocean after a commercial dispute. It will still have to pay Transocean an unspecified amount, but as Providence had already made an adjustment in its accounts for the full $19 million, a write-back is now on the cards.

C&C rose 2.6 per cent. The UK Takeover Panel has given it until January 6th to put up or shut up on a potential €1 billion offer for the Spirit Pub Company. A report yesterday said eating out spend in UK pubs rose strongly in November, underlining that a strategic shift is underway in the sector.

EUROPE

Bucking the European bank share trend, shares in Italian lender Banca Monte dei Paschi di Siena shed 6.9 per cent, hit by renewed fears of big writedowns on poorly performing loans. Monte Paschi is expected to book about €3 billion in gross loan writedowns in the last quarter, much higher than the €1.2 billion total booked over the previous three quarters.

Shares in oil and gas stocks ended lower, surrendering early gains as oil prices resumed their downward march. Both Technip and BG fell 1.7 per cent, while Eni dropped 1 per cent.

The biggest loser was French semiconductor engineering group Soitec, plummeting 55 per cent after warning on its profit outlook.

Roche Holding added 1.1 per cent after one of its drugs was approved in Switzerland to treat cervical cancer.

LONDON

UK stocks also advanced for a fifth day, led by Admiral Group and Compass Group. Admiral added 2.3 per cent, for the biggest gain on the benchmark equity gauge. Compass rose 1.9 per cent.

Kingfisher gained 1.8 per cent after agreeing to sell control of its unprofitable B&Q Chinese unit for £140 million pounds (€178 million).

HSBC rose by 0.7 per cent, on the back of the surge in bank stocks.

NEW YORK

Tech shares lifted the Dow, with Intel up 2.1 per cent to $37.14 in the afternoon and IBM up 2 per cent to $161.66. Cisco Systems rose 1.4 per cent to $28.17 by lunchtime.

Energy shares in the S&P 500 fell 1.6 per cent as West Texas Intermediate crude slid 2.6 per cent.

Achillion Pharmaceuticals said it would test a combination of two of its experimental hepatitis C drugs which showed promise in separate studies. Shares surged 15 per cent to $16.39 in the afternoon.

Gilead slumped more than 12 per cent to $94.80 and it was the biggest drag on both the S&P and Nasdaq 100 indexes. Express Scripts, the US's largest pharmacy benefit manager, said it would no longer cover Gilead's treatments. – (Additional reporting: Bloomberg/Reuters)