Rally continues on good economic data

EUROPEAN STOCKS rallied the most in a month as the deadline on Greece’s debt swap approached and Germany’s industrial output increased more than forecast.

A report showing that hiring in the US increased in February also boosted sentiment across markets, with the Iseq index in Dublin rising by 2.8 per cent.

DUBLIN

Dragon Oil was the main winner on the day, closing up 7.8 per cent.

Packaging group Smurfit Kappa finished the day up 5.99 per cent.

“It had probably been oversold last week as a large block of shares was placed in the market,” one trader said.

“There was a bit more confidence in general today.”

Irish Continental Group finished the day 1.6 per cent higher at €15.45 after posting its full-year results. Turnover rose by 4.2 per cent but its operating profit fell by 8.3 per cent as its fuel costs increased by €10.7 million.

Paddy Power was one of the biggest losers on the day, with the share price falling by 1.8 per cent to €47.28. “It’s had a great run and this was probably a little profit taking.”

LONDON

UK stocks advanced for a second day as optimism mounted that private creditors will approve a Greek debt swap and as the Bank of England maintained its key interest rate and bond-purchase target.

William Morrison Supermarkets rose after reporting an increase in full-year profit.

ARM Holdings jumped 3.6 percent after Morgan Stanley upgraded the stock.

The FTSE 100 Index gained 68.32, or 1.2 per cent, to 5,859.73 at the close in London.

The Bank of England held its key rate at 0.5 per cent and maintained its commitment to buy an additional £50 billion (€60 billion) of bonds by May after lifting its target for asset purchases to £325 billion last month, as forecast by economists.

European Central Bank policy-makers kept the benchmark rate at a record low of 1 per cent yesterday, meeting economists’ forecasts.

EUROPE

European Aeronautic, Defence and Space (EADS) climbed to a five-year high after doubling its dividend and predicting earnings will climb.

BNP Paribas jumped 3.7 per cent as Simon Property Group agreed to buy some of the French bank’s stake in Klepierre.

Enel SpA, Italy’s largest energy company, sank 5.7 per cent after cutting its dividend.

The Stoxx Europe 600 Index advanced 1.6 per cent to 264.16 at the close in London, the biggest increase since February 3rd.

The gauge rose 0.6 per cent yesterday after a private report showed hiring in US companies accelerated last month.

The measure has surged 8 per cent this year as the European Central Bank lent the region’s lenders more than €1 trillion for three years to ease liquidity.

“Investors will be able to draw a line under Greece that has been going on for too long,” said Mike Lenhoff, chief strategist at Brewing Dolphin Securities Ltd in London.

Data showed the number of Americans filing claims for jobless benefits rose to 362,000 last week.

National benchmark indexes rose in all of the 18 western European markets.

France’s CAC 40 and Germany’s DAX both rallied 2.5 per cent.

EADS surged 11 per cent to €29.74, the highest price since May 2006. The maker of Airbus passenger jets agreed to pay a dividend of 45 cents a share, more than doubling the payout from last year and exceeding analyst estimates for a 30-cent dividend.

NEW YORK

US stocks rose in early trading as Greece moved closer to concluding a bond swap with private creditors that is needed to stave off a messy default.

The SP 500 continued to claw back after a string of losses drove the index down more than 2 per cent in three sessions.

Adding to Wednesday’s gains, it is still down slightly for the week.

An SP index of basic materials stocks shot up 1.5 per cent, leading the the SP 500’s advance.

The Reuters/Jefferies CRB commodities index rose 0.5 per cent, shifting into positive mode after four straight down sessions.

The Dow Jones industrial average closed up 70.61 points, or 0.55 per cent, to 12,907.94 .

Shares of Coach, the luxury leather goods brand and retailer, hit a record high of $78.22 on the overall positive tone of the company’s presentation at the Bank of America consumer and retail conference.

The stock jumped 5.4 per cent to $77.36 in midday trading.

Shares of American International Group fell 2.8 per cent to $28.62 after the US Treasury priced its $6 billion AIG offering at $29 a share, allowing the Obama administration to break even on its investment in the insurer as it winds down bailout programmes that resulted from the financial crisis. – (Additional reporting by Bloomberg and Reuters)