European stocks rally after weak start

EUROPEAN STOCKS had a more negative tone yesterday, following a strong performance of late, with the volume of shares changing hands lower than in previous days, and the Bank of England cutting its growth forecast. However, a late rally offset a somewhat weaker start to the session.

DUBLIN

THE ISEQ index finished the session more or less flat on the day, following a slow start in line with European markets.

Elan continued to be the main focus of attention yesterday, recovering more than 6 per cent of its value yesterday after heavy losses the previous day on the back of the announcement of the failure of clinical trials for its Alzheimer drug. The stock closed the session at €8.95 yesterday.

DCC was one of the strongest performers yesterday, as it announced the acquisition of BP’s liquefied petroleum gas (LPG) distribution business in the UK for €50 million, further solidfying the company’s presence in the UK. DCC finished up 1.5 per cent on the day at €20.50.

Kerry Group finished off ½ a per cent ahead of its interim results today, with analysts expecting few surprises from the consistently solid performer.

Bank of Ireland, which reports interims tomorrow, closed off 2 per cent at €0.099.

Elsewhere, Ryanair finished up 0.2 per cent at €4.055 despite the news yesterday afternoon that the British Competition Appeal Tribunal dismissed an appeal by Ryanair, which would have blocked regulators investigating the budget carrier’s minority shareholding in rival Aer Lingus .

Aer Lingus, which is the subject of a current takeover bid from Ryanair, slipped 0.3 per cent on the day to finish the session at €1.07.

LONDON

UK STOCKS rose yesterday, with the FTSE 100 Index climbing in the final minutes of trading as gains in stocks including Standard Chartered and Rio Tinto Group helped offset the Bank of England’s reduced economic outlook. Standard Chartered jumped 8.6 per cent, rebounding from yesterday’s selloff, amid speculation the lender may become a takeover target.

Rio Tinto Group rose 2.9 per cent after earnings topped analyst estimates.

Smiths Group and Serco Group both lost more than 2 per cent by lunchtime as analysts cut their recommendations on the shares, while International Consolidated Airlines Group led declines on the index.

The benchmark FTSE 100 rose 4.68 points, or 0.1 per cent, to 5,845.92 at the close in London for a fourth-day of gains. Of the gauge’s 101 members, 59 rose, while 39 fell.

The index had fallen as much as 0.7 per cent during the day.

Fifteen blue chip stocks traded ex-dividend yesterday including heavyweights Royal Dutch Shell, BP, AstraZeneca, GlaxoSmithKline, and Barclays knocking 25.41 points in total off the FTSE 100.

EUROPE

European stocks advanced for a fourth day, erasing earlier losses, as shares of commodity companies and banks gained.

Rio Tinto Group led basic-resources producers higher, climbing 2.9 per cent. Bankia SA surged 24 per cent.

ING Groep NV, the largest Dutch financial-services company, lost 1.3 per cent and Securitas AB, the worlds second-biggest guarding-services company, sank 8.8 per cent, after both reporting worse-than-estimated earnings.

The Stoxx Europe 600 Index rose 0.2 per cent at 269.20 at the close of trading, the highest since March 19th despite low volumes.

National benchmark indexes fell in 11 of the 18 western European markets yesterday.

France’s CAC 40 Index declined 0.4 per cent and Germany’s DAX Index retreated less than 0.1 per- cent.

Fresnillo Plc, the biggest primary silver producer, advanced 2.3 per cent to 1,565 pence.

NEW YORK

US STOCKS were little changed for most of the day yesterday, amid light trading, with few signals to push shares in either direction one day after the benchmark SP 500 closed above 1,400 for the first time in more than three months.

The SP 500 has been up for five consecutive weeks, boosted by expectations for action from the European Central Bank and the US Federal Reserve.

Shares in Dean Foods, which is spinning off a unit, jumped 36.9 per cent to $17.00 by lunchtime, a day after the US dairy company posted a stronger-than-expected quarterly profit.

Fashion juggernaut Ralph Lauren and travel website Priceline both forecast slowing demand due to the global slowdown.

Ralph Lauren shares fell 2.1 per cent to $149.84 by lunchtime while Priceline’s stock plummeted 15.9 per cent to $571.95.

Shares of MEMC Electronic Materials rallied after the silicon wafer maker reported a surprise quarterly profit on an adjusted basis.

(Additional Reporting: Bloomberg/Reuters)