Rising hopes lift European stocks

RISING EXPECTATIONS of increased efforts to boost economic growth in Europe and China led to a bounce back on the European markets yesterday.

Gains across the continent and in the UK were reflected in Dublin, where the Iseq ended the day at 3,087.81, a rise of 1.87 per cent.

Meanwhile the IPO of Facebook in the US continued to prove controversial and disappointing for those who put money into the social networking company since Friday, while the huge losses on massive risk-taking by JPMorgan fuelled renew debate on introducing tougher banking controls in the US. Nevertheless banking shares led the gains on the New York market.

DUBLIN

DUBLIN SAW a rise of 1.87 per cent in the Iseq, mirroring reactions in its counterparts across Europe as the clamour for more measures to boost economic growth continued.

Irish bonds, which were the subject of interest rate increases last week, marked time and there was a sense that all eyes are now on the outcome of the upcoming Greek election.

Traders said Ryanair was getting grief on its roadshow for the guidance it was giving for the coming year, with many brokers expressing expectations of higher returns than those being suggested by the airline.

The company’s share price had a turbulent day and finished at €4.01, a fall of 0.74 per cent.

Buildings materials group CRH closed at €14.35, a rise of 3.84 per cent. Paddy Power closed at an all-time high of €50.70, a rise of 1.40 per cent.

Other stocks such as DCC, Smurfit Kappa and Kerry all moved in the right direction,increasing, respectively, by 1.18 per cent, 3.24 per cent, and 1.84 per cent. Despite all the talk on the airwaves and elsewhere about mortgage arrears and the fragile state of Irish banks, Bank of Ireland finished the day level, at €0.08.

LONDON

THE WORLD’S biggest sandwich maker, Greencore, now listed in London, released half-year results that pleased the market. Profits remained strong despite challenging market conditions as the company’s revenues increased by 49.9 per cent to £567.7 million for the six months to the end of March.

The board announced an interim dividend of 1.75 pence per share. It closed up 6.2 per cent, at 72.75p.

The FTSE 100 Index closed 36.9 points higher but appetite for risk remained fragile.

Notable risers in London included Royal Bank of Scotland, which was 0.8p higher at 20.8p, and Barclays after an improvement of 3.9p to 180p.

The latter announced it is to sell its $6.1 billion US dollar stake in investment manager Blackrock as it comes under pressure to improve its return to shareholders. The move comes after Barclays faced steep criticism over its return on equity, which fell to 6.6 per cent in 2011, from 6.8 per cent the previous year, and well below its 13 per cent target.

The biggest Footsie risers were Vedanta Resources, up 49.5p at 1008p, Man Group, ahead 3.5p at 78.8p, Royal Bank of Scotland, up 0.8p at 20.8p and Polymetal International, ahead 29p at 828p.

EUROPE

EUROPEAN STOCKS recorded their biggest daily gain in a month, boosted by expectations that Europe and China would take measures to foster economic growth, although lingering political uncertainty kept investors on edge.

Traders said buyers were coming back to knocked-down cyclical stocks ahead of tomorrow’s European Union summit, which is expected to discuss ways to shore up Europe’s economy, such as EU “project bonds” to finance infrastructure in troubled euro debtor states.

Automotive shares, which tend to perform in tandem with the economy, rallied 3 per cent, with domestic plays such as Fiat and Renault up over 6 per cent, gaining roughly twice as much as exporters Daimler and BMW .

US

FACEBOOK’S SHARES fell again, leaving them down more than a quarter from Friday’s highs as questions mounted over the company’s financial prospects and its ability to grow fast enough to live up to the hype surrounding its stock.

After Friday’s nearly flat close and Monday’s 11 per cent plunge, the stock dropped as much as 9 per cent in early trading yesterday before reversing some of the decline.

Shares were down 4 per cent at $32.70 just after midday. Volume was again heavy, with more than 66 million shares traded.

Overall US stocks rose, with the biggest gain in two months for the Standard Poor’s 500 Index.

Financial shares had the biggest gain among 10 S&P 500 groups as JPMorgan Chase and Co jumped 5.1 per cent. Best Buy Co, the largest U.S. consumer-electronics retailer, added 1.3 per cent after profit beat estimates. – (Additional reporting, Reuters and Bloomberg)