Stocks weak ahead of Bernanke speech

THE DUBLIN market finished the day slightly down as the release of data by three listed companies failed to boost volume levels on the exchange.

Markets were weak across Europe with traders saying investors were awaiting the annual speech of US Federal Reserve chairman Ben Bernanke at the central bank’s symposium at Jackson Hole, Wyoming, tomorrow. Bernanke’s address in 2010 preceded a second round of bond purchases, or quantitative easing, to support economic growth.

DUBLIN

GLANBIA WAS the story of the day. The food group upgraded its full-year outlook as it described its performance in the first half of the year as “solid”. It said it was now expecting growth of between 8 per cent and 10 per cent in adjusted earnings per share for the year.

It also said it had signed a non-binding memorandum of understanding with majority shareholder Glanbia Co-operative Society to enter into a joint venture regarding its dairy ingredients Ireland business.

The news was greeted favourably by the market and the stock closed at €6.38, a rise of 6.33 per cent.

Paddy Power disclosed that its pre-tax profit rose 21 per cent in the six months to June 30th, 2012. The bookmaker said profit before tax was €68.7 million, despite what it described as “adverse” sports results since its May trading update.

Traders said investors reacted negatively at first to the report but, as the day progressed and the numbers were digested, the fall in the stock was reversed. It closed at €53.15, a rise of 0.63 per cent.

Builders’ merchanting and DIY group Grafton told the market in an interim statement that revenue passed €1 billion in the first six months of 2012, rising 4.6 per cent. The group said underlying profit before tax, which excludes restructuring charges and amortisation, was 18.1 per cent higher at €23.8 million.

The stock closed at €3.15, unchanged on the day.

The largest market cap company on the exchange, CRH, closed at €14.28, a fall of 0.97 per cent.

LONDON

BRITISH STOCKS declined, led by a sell-off in mining companies. Rio Tinto lost more than 3 per cent as bond risk surged to a two-month high. Weir dropped 2.8 per cent after US peer Joy Global cut its earnings forecast.

Barclays fell 1.4 per cent as the lender was said to face a possible probe. Two people familiar with the case said the Serious Fraud Office may open a criminal probe as soon as this week into payments the bank made in 2008 to Qatar’s sovereign wealth fund.

The FTSE 100 Index retreated 0.6 per cent to 5,743.53 at the close, after briefly paring losses earlier as data showed the US economy expanded more than previously estimated. The broader FTSE All-Share Index slid 0.5 per cent.

Speculation that central banks will do more to bolster growth has helped drive up equity markets with the SP 500 rallying 10 per cent since June 1st and the Stoxx 600 climbing 14 per cent from June 4th.

EUROPE

EUROPEAN STOCKS ended slightly off in extremely low volumes, with investors reluctant to boost their exposure to risk pending messages from central banks about any further stimulus measures.

The FTSEurofirst 300 index of top European shares ended 0.2 per cent lower at 1,086.24 points, while the euro zone’s blue-chip Euro STOXX 50 index fell 0.3 per cent to 2,434.23 points.

Trading volume on the FTSEurofirst 300 represented only 56 per cent of the average daily trading volume of the past 90 days, making the session’s volume one of the lightest this year.

L’Oréal sank 4.4 per cent after the cosmetics giant posted second-quarter results that missed market expectations a month after reporting solid organic sales growth.

Deutsche Post, the world’s biggest carrier of air and sea freight by volume, added 1.1 per cent to €15.53. Lufthansa slipped 1.3 per cent to €9.71 after wage negotiations with Europes second-largest airline broke down.

BMW, the worlds biggest maker of luxury cars, lost 0.5 per cent to €60.21.

NEW YORK

US STOCKS rose, halting a two-day drop, and Treasuries fell as economic growth was revised higher.

Oil slid as Hurricane Isaac’s landfall reduced threats to offshore energy facilities.

Crude for October delivery lost 1.1 per cent to $95.29 a barrel and gasoline fell 0.9 per cent. The Dollar Index, a gauge of the currency against six major peers, climbed 0.2 per cent to 81.55.

The economy grew at a 1.7 per cent annual rate from April through June, up from an initial estimate of 1.5 per cent, government data showed.

WellPoint increased 8 per cent after Angela Braly resigned as chairman and chief executive of the health insurer.