Smurfit Kappa gains fail to lift Iseq

Eurostoxx 50:2,512.77 (–0.05%) Frankfurt DAX:6,748.76 (–0.08%) Paris CAC:3,410 (–0.05%

SMURFIT KAPPA was the story of the day, with the figures it released yesterday morning exceeding predictions and creating strong interest in the stock. More than five million shares traded between Dublin and London.

DUBLIN

THE ISEQ Index lost 0.6 per cent.

Paper and packaging group Smurfit Kappa reported pretax profits of €299 million for 2011, compared to €103 million a year earlier. Moody’s placed the leading containerboard and corrugated packaging producer’s ratings under review for possible upgrade following the publication of the results.

The reduction in its net debt figure to €2.75 billion was also a pleasant surprise to the markets as was news that Smurfit Kappa is reintroducing dividends after a two-year hiatus.

The stock rose 10.66 per cent on the day, to close at €7.30.

Elan also released new data though the effect on its share price was more muted. It predicted revenue this year will rise as much as 17 per cent as sales growth of the Tysabri multiple sclerosis drug accelerates. The stock finished the day down 0.52 per cent, at €10.43.

United Drug continued to trade well. On Tuesday the stock sold approximately 15 times its average daily volume and yesterday it sold 10 times its average.

Traders said some larger holders of the stock were selling while some new names were building up new stakes in the business. Prudential in Britain has announced it had a 13 per cent stake. Traders said the stock is being favourably viewed because 70 per cent of its business is now outside the Irish market.

The share closed at €2.08, an increase of 2.46 per cent.

Traders said a number of large institutions continued to show interest in Bank of Ireland. The stock closed at €0.14, a fall of 0.69 per cent.

LONDON

BRITISH STOCKS fell for a third day, the longest losing streak in three weeks, amid ongoing conc- ern that Greece’s political leaders might fail to reach a consensus on terms for a second bailout.

BHP Billiton the world’s biggest mining company, reported a 5.5 per cent drop in first-half profit, the first decline since 2009, as rising costs and lower output and prices cut its earnings from base metals by half.

Energy company International Power slid 2.8 per cent as it forecast weaker growth in 2012. Reckitt Benckiser, the maker of Dettol handwash, advanced 2.9 per cent after saying sales growth in 2012 will outpace the industry.

The FTSE 100 Index fell 14.33, or 0.2 per cent, to 5,875.93 at the close in London. The benchmark measure has still rallied 19 per cent from last year’s lowest level as economic data suggested the recovery in the US economy is on track. The FTSE All-Share Index also slipped 0.2 per cent. EUROPE

THE STOXX Europe 600 Index lost 0.2 per cent at the close, after earlier advancing 0.6 per cent. The benchmark measure has rallied 22 per cent from last year’s low and 7.6 per cent this year as investors speculated that Greece will accept the spending cuts needed to obtain further financial aid from the rest of the euro area.

National benchmark indexes climbed in 10 of the 18 western- European markets.

Vestas plunged 14 per cent to 57.50 Swedish kroner for the largest slump on the Stoxx 600.

The world’s biggest wind-turbine maker reported an annual loss of €166 million.

Portugal’s PSI 20 Index jumped 1.9 per cent. Banco Espirito Santo surged 13 per cent to €1.67, while Banco Comercial Portugues rose 5.1 per cent to €18.5.

UniCredit, Italy’s biggest lender, added 2.2 per cent to €4.48. Intesa Sanpaolo, the country’s second-largest bank, gained 3 per cent to €1.60.

Statoil climbed 1.3 per cent to 152 Norwegian kroner. Norway’s national oil company reported fourth-quarter net income of NKr25.5 billion.

US

US STOCKS rose driving the Dow Jones Industrial Average higher. The Dow jumped 5.75 points, or 0.04 per cent, to 12,883.95 and the Standard and Poor’s 500 Index advanced 0.22 per cent at the close in New York.

The euro was little changed at $1.3236 after reaching an almost two-month high.

Ten-year US Treasury yields increased less than one basis point to 1.98 per cent.

While geo-political risks have risen investors are taking their cue from policy makers who are driving down interest rates.

Energy stocks fell 1 per cent as a group for the biggest decline in the SP 500 among 10 industries. Exxon Mobil and Schlumberger lost more than 1 per cent. Oil fluctuated near $98.50 a barrel, erasing an earlier rally that took futures above $100.

Moody’s lost 2.1 per cent as the owner of the world’s second-largest provider of credit ratings said fourth-quarter profit fell 30 per cent after Europe’s sovereign-debt crisis slowed bond sales around the world. – (Additional reporting Bloomberg, Reuter)