Europe rallies but Iseq finishes down

Germany’s Dax raced to record highs on Monday, part of an extended rally of the European stock market driven by investors’ expectations that a weakened euro will boost the region’s economy and lift exporter earnings.

The positivity was not reflected in Dublin, where the Iseq finished the day at 6,114.42, down 98 points.

Dublin

The Dublin stock market took an 11 per cent bite out of the share price of Aryzta, the Swiss-Irish food group, after it reported half-yearly results that missed analysts’ expectations. It was the worst performing stock on the Iseq on a quiet day of trading. Aryzta reported a 13 per cent jump in revenues but investors were disappointed with its performance in

North America

.

CRH was heavily traded with more than 9,000 separate deals on the Dublin market, the group's secondary listing. Investors are nervous that its €6.5 billion purchase of assets from Holcim-Lafarge could be unpicked after those two companies said they are re-examining the terms of their merger, from which CRH was due to pick up leftover assets. CRH closed down 4.7 per cent.

Ryanair rose by more than 1.3 per cent as investors greeted the news that its board has ratified a push into the transatlantic market in coming years. Investors were cheered at the potential opening of a new frontier.

London

Tesco

shares were up 3.8 per cent after Bloomberg, citing a source familiar with the matter, reported that

WPP

was interested in Tesco’s data unit.

The UK mining index was up 0.4 per cent after Chinese prime minister Li Keqiang said on Sunday the country had a lot of room to manoeuvre its policy and boost the economy.

Rio Tinto, BHP Billiton and Randgold Resources gained 0.9 to 1.3 per cent. "We believe that market optimism on the mining sector is at a pretty low level on concerns regarding supply-side issues and the sustainability of Chinese growth. And that makes the sector sensitive to any good news coming through," said Robert Parkes, equity strategist at HSBC Global Research. "It's a cyclical sector and is exposed to a re-acceleration in the global economy."

Tullow Oil slipped 6 per cent following a sharp drop in crude oil prices and as Exane BNP Paribas cut its target price for the stock by 5 per cent.

Europe

The European rally pushed up Switzerland’s SMI equity index back towards levels last seen in January, before the

Swiss National Bank

abandoned a three-year peg holding the value of its currency to 1.20 francs per euro. That move had sent the franc soaring and the Swiss share index tumbling.

The Dax closed up 2.2 per cent at 12,167.72 points, smashing through the 12,000-point level for the first time.

The pan-European FTSEurofirst 300 index rose 1 per cent to 1,594.70 points, its highest since late 2007, while Zurich’s SMI rose 0.9 per cent to 9,237.08 points.

Siemens was one of the top DAX performers, rising 2.4 percent to its highest level in about seven years after the German engineer won some Egyptian contracts. Italy's FTSE MIB equity index also rose 1 per cent to 22,930.92 points, a four-year high.

US

The dollar fell across the board Monday on investor concerns its recent strength could prompt the

Federal Reserve

to be more cautious about raising interest rates this year.

The S&P utilities index was up 2.1 per cent, leading the day's gains. The S&P healthcare sector was up 1.9 per cent, helped by a 3.6 per cent price increase in shares of Amgen to $159.73.

Salix Pharmaceuticals shares rose 1.98 per cent to $172.76 after it agreed an increased $173 per share offer from Valeant Pharmaceuticals.

At 1.19pm, the Dow Jones industrial average rose 0.99 per cent to 17,925.75, the S&P 500 gained 0.97 per cent to 2,073.3 and the Nasdaq Composite added 0.78 per cent to 4,909.98.