TSB surges 12% on first day of trading

European stocks were little changed yesterday, paring gains in the final minutes of trading, amid increased merger and acquisition activity.

The Stoxx Europe 600 Index slipped less than 0.1 per cent to 348.09 at the close of trading. The benchmark gauge advanced 0.3 per cent this week as the Federal Reserve pledged to keep interest rates low for a prolonged period.

The FTSE 100 closed up 0.3 per cent, or 17.09 points, at 6,825.20 points – within reach of a 6,950.60 record set in 1999. Germany’s DAX slipped 0.2 per cent and the CAC 40 fell 0.5 per cent.

In Dublin, the Iseq index closed down 59.55 points, or 1.2 per cent, at 4,812.92.

DUBLIN Analysts described it as a somewhat tetchy day on the Iseq with lots of index-rebalancing activity taking place towards the close of business that reversed earlier gains. Smurfit Kappa and C&C were among the companies to feel the impact of this.

Shares in Smurfit Kappa ended the day sharply down at €16.36, having traded at about €17.00 for most of the day. This was down 3.2 per cent on the previous day's close. It was a similar tale for C&C, which ended down 2.5 per cent at €4.80, having hovered at the €4.85 mark earlier on.

Insurer FBD was the main mover of the day, however, with its shares falling the most in more than five years after it cut its full-year earnings forecast. Shares dropped as much as 8.8 per cent, the most since March 2009 in early trading but rebounded later in the day to close down 3.2 per cent to €15.90.

Investors reacted positively to news that property investment company Green Reit has agreed to buy two Dublin city centre office buildings for €32 million. Shares in the company, which also confirmed the refinancing of secured debt on its Central Park acquisition, closed up 2.3 per cent to €1.32.

LONDON The FTSE 100 rose on the back of a surge in shares of drugmaker Shire, leaving many traders to expect the benchmark index to test record highs soon. Shire hit an all-time high and closed up 16.9 per cent at 4,371 pence, adding 15 points to the FTSE, after rejecting a bid from AbbVie that would have valued Shire at about £27 billion.

TSB Banking Group surged 12 per cent on its first day of trading as Lloyds Banking Group sold a 35 per cent stake in the lender, more than initially planned, in an initial public offering. TSB shares, which were priced at 260 pence in the IPO, closed up 30 pence higher at 290 pence in London, valuing the lender at £1.45 billion.

A surprise move by Sainsbury's to enter the discount market in a joint venture with Danish supermarket Netto had little impact on shares. Netto, which left the UK in 2010, will open 15 stores in the UK market next year in a deal that will see its owner Dansk Supermarket and Sainsbury's invest £12.5 million each. Shares in Sainsburys fell 4.5p to 316.8p.

EUROPE Alstom advanced 1.1 per cent to €28 after Siemens and Mitsubishi Heavy Industries raised the cash component of their offer for the company but events moved on in the afternoon after GE's $16.9 billion offer for the group was given the green light by the French government.

Euronext slipped 2 per cent to €19.60 after the owner of markets in Belgium, France, Portugal and the Netherlands was spun off from Intercontinental Exchange through an €845 million IPO. ICE sold 42.2 million shares for €20 apiece.

NEW YORK US stocks climbed in early trading, lifting the S&P index to a third straight intraday high and its sixth day of gains. The Dow Jones industrial average rose 50.02 points, or 0.30 per cent, at 16,971.48.

Oracle shares were down 5.3 per cent to $40.26 as the biggest drag on the S&P 500 after it posted fourth-quarter results that disappointed investors looking for more progress against rivals selling web-based services. (Additional reporting: Reuters, Bloomberg)