European markets remain flat

GLOOMY FIGURES from Britain and US, added to the general concerns about the EU’s sovereign debt crisis, ensured European markets were weak again yesterday.

The UK produced figures showing that gross domestic product – a measure of the wealth that a country produces – fell by 0.7 per cent in the second quarter of the year. At the same time, in the US, sales of new houses dropped in June from a two-year high.

Purchases decreased to a 350,000 annual rate, down 8.4 per cent from May and the weakest since January, the Commerce Department reported.

Both sets of data were worse than generally expected, but analysts singled out the unexpectedly deep fall in the UK economy as the more surprisingly bad of the two.

“Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd in London described the figures as a bit of a startler. “After three quarters of negative growth, the UK’s now firmly in the European camp of stagnation,” he said. “Decent earnings results, particularly from the big international companies, are providing some support.”

DUBLIN

THE IRISH market started weak but improved as the day wore on, dealers said yesterday, helped by some corporate news.

Exploration group Providence, which announced that its oil and gas find at Barryroe off the Cork coast is considerably better than originally believed, was strong early in the day, rising as high as €8.95 before slipping back later to close just 0.77 per cent ahead at €8.414.

Pharmaceutical and healthcare products distributor, United Drug, was another mover, closing 1.89 per cent up at €2.099. Dealers said there has been a lot of movement in the stock this week.

Ryanair continued a drift that began this week ahead of numbers due to be published next Monday. Investors feel the company may lower its guidance for the year as a whole next week. It closed 0.8 per cent off at €3.859. Drinks group CC held up well, adding 1.23 per cent to close at €3.30.

In other markets-related news, Aminex chairman Brian Hall was appointed to the board of Great Western Mining, which is in the initial phases of exploring for gold and copper in Nevada in the western US. Great Western is chaired by Mr Hall’s former colleague and associate, Emmett O’Connell.

LONDON

BRITAIN’S TOP share index steadied after three days of falls thanks to a mixed batch of corporate results. At the close, the FTSE 100 index was broadly flat at 5,498.32.

GlaxoSmithKline slid 1.4 per cent to 1,425.5 pence after cutting its sales forecast for the year. The company reported second-quarter core earnings per share of 26.4 pence, lower than the average analyst estimate of 26.8 pence.

BT slid 3.4 per cent to 210 pence, its biggest retreat in six weeks, after reporting fiscal first-quarter sales of £4.48 billion sterling. That missed the average analyst estimate of £4.58 billion pounds in a Bloomberg survey.

On the upside, ARM Holdings, up 8.6 per cent, was the top gainer trading in high volume of almost twice its 90-day daily average, with the chip designer’s results beating market expectations as demand for its low power chips in smartphones and tablets outstripped the industry.

Tullow Oil, which produced interim results in line with expectations yesterday, shed 6.3 per cent in heavy volumes to close at 1,284 pence as investors focused on the risks and costs associated with its proposed Uganda development.

EUROPE

THE STOXX Europe 600 Index dipped 0.1 per cent to 250.26 at 4.30pm yesterday. The benchmark measure, which tracks leading stocks in 18 markets, has lost 4.4 per cent over the last four days on fears about Greece and Spain.

Informa fell 5.3 per cent to 350.4 pence. The publisher of Lloyd’s List posted a first-half loss compared with a profit a year earlier as it sold events businesses in Hungary, Austria, the Czech Republic and parts of Germany.

Daimler advanced 4.1 per cent to €37.62 after saying second-quarter sales increased 10 per cent to €28.9 billion. The world’s third-largest maker of luxury cars also posted earnings before interest and taxes of €2.24 billion, which was in line with expectations.

Lonza jumped 3.7 per cent to 45.50 Swiss francs after saying first-half earnings before interest and tax increased 24 per cent to SFr168 million, beating analaysts’ estimates. The volume of shares changing hands in companies listed on the Stoxx 600 was 22 per cent lower than the average of the last 30 days, according to data compiled by Bloomberg.

NEW YORK

THE STANDARD Poor’s 500 Index rose as a rally in financial shares tempered disappointment with Apple’s results and the drop in new US home sales.

Financial shares in the SP 500 gained, JPMorgan Chase added 1.8 per cent and Citigroup rose 3.2 per cent. (Additional reporting: Bloomberg/Reuters)