Strong US opening boosts sentiment

GLOBAL STOCK markets remained firm yesterday as a stronger opening in the US led to improved sentiment throughout the day, offsetting earlier weakness after China reported that foreign direct investment fell for the eighth time in nine months.

Oil prices softened somewhat on the back of US data which showed a weakening of business conditions, though Brent crude prices remained at the elevated level seen over the last month.

DUBLIN

VOLUMES WERE thin in Dublin, with trading lighter than in previous days when a number of companies had reported interim results.

The picture improved throughout the day, buoyed by a strong opening in the US, with the Iseq finishing the session pretty much flat on the day.

CRH continued to attract investor interest yesterday on the back of its interim results this week.

Its share price slide continued, though at a slower pace than in previous days, with the stock losing 0.5 per cent on light volumes. It finished the session at €14.235.

News that Etihad may be eyeing Ryanair’s investment in Aer Lingus had minimal impact on the share performance of the budget airline or Aer Lingus, which is currently the subject of a takeover bid from Ryanair, according to traders.

Ryanair finished 0.2 per cent off at €4.07, while Aer Lingus added 0.4 per cent, closing the day at €1.074.

Elsewhere, Smurfit Kappa put in a strong performance, advancing almost 5 per cent, though on light volumes.

Paddy Power lost 1.5 per cent to €52.70 ahead of interim results next Wednesday.

LONDON

UK STOCKS mirrored the performance of the Iseq index, ending the session pretty much flat having pared earlier losses. The index was boosted by better-than-expected UK retail sales.

BG Group, the UK’s third largest natural gas producer, declined 0.3 per cent to 1,317.5 pence after Morgan Stanley cut its rating of the stock to equal weight, the equivalent of hold, from overweight.

Vedanta, an aluminium and copper producer in India, and Kazakhmys, the biggest copper miner in Kazakhstan, advanced 2 per cent to 937.5 pence and 2.8 per cent to 735 pence respectively.

A gauge of London-listed mining companies gained 1 per cent, rebounding from a three-day slump.

Vodafone, the world’s second largest mobile phone company, lost 1.7 per cent to 185.55 pence. Telecom Austria reduced its 2012 profit and sales forecasts, and China Mobile, the world’s biggest phone company by subscribers, said profit growth cooled to the slowest annual pace in at least 13 years.

EUROPE

EUROPEAN STOCKS, which have strengthened over the last 10 weeks, continued to advance yesterday. National benchmark indexes advanced in 15 of the 18 western European markets. France’s CAC 40 index rose 0.9 per cent, and Germany’s DAX increased 0.7 per cent.

Novozymes, the world’s biggest maker of industrial enzymes, gained 4.8 per cent after reporting second-quarter profit that exceeded analysts’ projections.

Mediaset surged 11 per cent amid reports Middle East investors are buying shares in the Italian broadcaster.

Telekom Austria slid 5.6 per cent after cutting its profit and sales forecast for 2012.

The Stoxx Europe 600 index climbed 0.3 per cent to 271.22 at the close, its highest level since March 19th. The volume of shares changing hands on the Stoxx 600 was 17 per cent lower than the average of the last 30 days, according to Bloomberg data.

NEW YORK

US STOCKS advanced, sending the Standard Poor’s 500 index toward the highest level since April at one stage, as building permits jumped in July to a four-year peak and Cisco Systems earnings beat estimates.

However, most of the attention focused on Facebook which fell to an intraday low after freeing up an additional 271.1 million shares, boosting by 60 per cent the number available to trade and compounding concerns that have depressed the stock since the initial public offering.

Cisco surged after the biggest maker of computer-networking equipment reported quarterly profit and sales that topped analysts’ estimates.

Sears added 6 per cent to $59.98 after the retailer, which is controlled by hedge fund manager Edward Lampert, reported a smaller second-quarter loss helped by reduced inventory costs.

Wal-Mart fell 3.3 per cent to $71.97 after the world’s largest retailer reported a 4.5 per cent increase in total second-quarter revenue to $114.3 billion.

Meanwhile, commodities continued to rise, reaching a three-month high, led by wheat and natural gas.

Additional Reporting: Bloomberg and Reuters