Inflation data cools ECB stimulus speculation

European shares eked out small gains in thin trading across the continent yesterday, but most European bourses closed off their morning highs, after euro zone inflation data slightly cooled market speculation about fresh monetary stimulus by the European Central bank, which has been a key driver behind the market bounce over the past three weeks.

US stocks were poised for the biggest monthly gain since February amid improving economic data across the Atlantic.

Twelve out of 18 national benchmark indexes in western Europe rose yesterday. Germany’s DAX added 0.1 per cent, while France’s CAC 40 gained 0.3 per cent. The UK’s FTSE 100 increased 0.2 per cent. The Iseq in Dublin fell 0.3 per cent.

DUBLIN

Fyffes

was among the best performers in Dublin yesterday as investors gained in confidence that it may get its $1 billion proposed merger with Chiquita away, following a scheduled shareholders’ meeting next month. The deal has been under threat from a rival cash bid from a Brazilian orange juice magnate. However, analysts said this week that extra cost savings identified by the merger parties mean the Brazilians may have to dig deep to convince Chiquita’s shareholders to drop their bid.

Fyffes

rose 4.25 per cent to €1.03.

Smurfit Kappa, the paper and packaging giant, crept up by 0.55 per cent to close at €17.26. Industry data has shown that European prices for testliner, a key recycled packaging product, have started to creep upwards. Analysts said this should help Smurfit keep box prices stable for this year, with possible increases in 2015.

Datalex consolidated its gains from Thursday by rising again, up 1.88 per cent. The Dermot Desmond-backed travel technology company reported revenue growth this week of 14 per cent, as more airlines buy its technology to improve their on-board retailing. It has recently signed up new customers such as Westjet and Virgin Australia.

LONDON

AstraZeneca

gained 2 per cent to 4,567 pence. Swedish newspaper

Dagens Industri

said

Pfizer

may have restarted bid talks with the London-listed drugmaker. The American company abandoned a $117 billion bid to buy

AstraZeneca

in May.

Tesco slid 6.6 per cent to 230 pence, its lowest price since 2003, after the UK's biggest retailer lowered its full-year profit forecast to a range of £2.4 billion to £2.5 billion and cut its interim dividend by 75 per cent to 1.16 pence per share.

It expects first-half trading profit to reach £1.1 billion.

Dave Lewis will take over as chief executive officer from September 1st, instead of October 1st, as previously announced.

Tesco's supermarket peer J Sainsbury lost 4.4 per cent, and Wm Morrison Supermarkets slid 5 per cent.

EUROPE

D’Ieteren

lost 2.8 per cent to €31.60 after posting first-half pre tax profit excluding one-off items of €86.7 million. That missed the average analyst estimate of €95.9 million. The owner of the world’s largest vehicle-glass repair company repeated its full-year forecast that profit before taxes and special items would drop 10 per cent.

European airline shares fell back after a small eruption occurred north of Iceland's Bardarbunga volcano. That prompted the Icelandic Met to raise the warning code for aviation to red, the highest level, for a few hours before returning it to orange having assessed that no threat existed. Shares in Air France were down 1.8 per cent and EasyJet fell 1.3 per cent.

NEW YORK

Avago Technologies

, a semiconductor-device supplier, rose 8.7 per cent for the biggest gain in the S&P 500 after it reported earnings that topped estimates.

Pacific Sunwear

of California, a clothing retailer, slid 8.3 per cent after projecting third-quarter losses that were deeper than analysts’ estimates.

Veeva Systems, the provider of cloud-based business services, jumped 18 per cent to $29.45. It boosted its year-end earnings prediction and reported second-quarter earnings that beat estimates.

Software company Splunk jumped 19 per cent to $54.10 after posting strong revenue growth and raising its full-year sales outlook. – Additional reporting: Bloomberg/Reuters