Stocks rebound from Monday's retreat

STOCKS ROSE in the US and Europe, rebounding from Monday’s worldwide retreat, amid better-than-estimated earnings and data indicating that the American housing market is stabilising.

The US Fed’s open market committee is to meet today and will decide on whether to change US interest rates.

The Dublin exchange was quiet as were most of its European counterparts, with volume picking up slightly in the afternoon as US data began to affect sentiment. Prices were firm.

DUBLIN

THE ISEQ closed up just 0.5 per cent, recovering somewhat from the more than 2 per cent drop on Monday that arose from renewed and heightened concerns about the European economy.

There was little by way of news and no stock drew particular attention to itself.

Bank of Ireland released a trading update that did not include any nasty surprises.

The bank said loans are down 3 per cent to €99 billion since the end of last year, with customer deposits in line with the level recorded in December 2011, at €70 billion.

The Bank of Ireland share price closed at €0.11, a rise of 1.8 per cent.

British gambling company 888 Holdings released its first quarter results for 2012, showing a 25 per cent increase in revenue to $94 million.

The extent to which this has affected Paddy Power is anyone’s guess. The Irish gambling group closed down 1.82 per cent, at €47.6.

Buildings materials group CRH closed at €15.02, a rise of 2.46 per cent, on very light volumes. Kingspan also did well, closing at €7.9, a rise of 3.32 per cent, although again on light volume.

LONDON

BRITAIN’S blue-chip shares rose, rebounding from the Europe-wide rout the previous day and helped by better-than-expected US housing data which boosted global risk appetite.

Broker comments boosted insurance stocks but hit tobacco shares.

The FTSE 100 index rose in tandem with US stocks following the release of US new home sales data, which dropped to four-month lows but came in above analysts’ expectations.

The UK index closed up 0.8 per cent, or 43.92 points higher.

The rebound came after the index had shed 1.9 per cent on Monday, when poor European manufacturing data coupled with political uncertainty in France and the Netherlands spooked investors, but some analysts said the sell-off was overdone.

Markets will now look ahead the release of first-quarter UK GDP figures today, which will reveal if Britain has entered a technical recession.

Shares in UK life insurers were among the top FTSE 100 risers, led by Aviva with a 4.2 per cent gain and Prudential up more than 1.7 per cent, as Bernstein Research initiated coverage on the sector with a “broadly positive stance”.

Capita was the biggest faller, dropping 6.4 per cent as investors digested the outsourcing group’s trading statement with the launch of an accelerated book-built placing of about 40 million new shares to raise cash to exploit growth opportunities.

Disappointing bed sales and a deterioration in trading in continental Europe led Britain’s biggest floor coverings retailer Carpetright to issue a full-year profit warning, sending its share price down 1.5 per cent, one of the biggest falls in the FTSE 250.

UK tobacco firms fell with shares in BAT and Imperial Tobacco shedding 1.8 per cent and 1 per cent.

EUROPE

IN EUROPE, shares rebounded as companies boasted bullish updates, such as French tire maker Michelin, which rose 6.1 per cent. The FTSEurofirst 300 index of top European companies closed up 1.1 per cent to 1,032.93, a day after hitting a three-month low.

The euro rallied against the dollar after two US housing reports eased worries about the U.S. economic recovery. National benchmark indexes gained in all of the 18 western European markets, except Greece. France’s CAC 40 rose 2.3 per cent and Germany’s DAX Index added 1 per cent.

TeliaSonera, Sweden’s biggest phone company, rose 6.6 per cent after saying it expected to receive about 22 billion kroner in dividends and proceeds from the sale of an indirect 8.2 per cent stake in MegaFon to Alisher Usmanov’s AF Telecom.

US

US STOCKS rose in early trade after strong earnings from big manufacturers, but the Nasdaq declined on weakness from large-cap tech companies.

AT&T, 3M and United Technologies advanced after profits topped estimates, extending the trend of this season’s robust results. ATT advanced 3.8 per cent to $31.77, while 3M gained 2 per cent to $88.84 and United Technologies rose 0.5 per cent to $80.11.

Apple, the world’s most valuable company, fell 2.3 per cent to $558.83. – (Additional reporting, Reuters)