European stocks up to 22-month high

A reassuring start to the US earnings season boosted demand for riskier assets and saw some European markets reach levels last seen in 2008.

DUBLIN

The Grafton Group helped steady the Iseq yesterday, as it soared by 6.8 per cent, adding 27 cent to finish up at € 4.18, on the back of a strong trading statement. The building materials group reported improved trading towards year end 2012, with sales up by almost 6 per cent on 2011, but it noted that Irish operations were still in the doldrums.

Overall, the Iseq finished flat to down slightly, giving up 7 points, or 0.2 per cent, to close at 3,524.33.

There was heavy trading in Bank of Ireland again yesterday, with about 250 million shares traded. It held steady at €0.14 in the wake of news of the Government’s sale of its bonds.

CRH went a little bit better yesterday, on “not huge activity”, to finish up about half a per cent or 6 cent at €15.06.

Following a technical trading error in Smurfit Kappa on Tuesday, it fell back by 32 cent, or 3 per cent, to €9.70 yesterday, in what was seen by brokers as just a correction.

The losers on the day were Kerry Group and Paddy Power, which both finished weaker. Kerry Group gave up €1.19 or 3 per cent, as a global investment bank issued a sell note on the stock. It closed down at €38.61.

Paddy Power was out of favour as well, “for no particular reason” noted one Dublin broker. It declined by €1.53, or 2.4 per cent, to finish down at €62.57.

LONDON

Britain’s blue-chip stocks hit their highest level since May 2008, with gains led by banking stocks and miners.

The FTSE 100 added 0.7 per cent to close up by 45.02 points at 6,098.65.

Miners rose by 0.8 per cent, posting their first gains in a week, as investors welcomed news that Alcoa, the largest aluminium producer in the US, saw improved revenues in the fourth quarter and offered a positive outlook for 2013.

Banks added over 20 points to the index, with Lloyds Banking Group the best performer, up 4.9 per cent as traders cited the impact of a UBS upgrade to “buy” from “neutral” with an increased target price of 60 pence.

EUROPE

European stocks rose to the highest in more than 22 months as the US earnings season got underway.

The Stoxx Europe 600 Index advanced by 0.7 per cent to 288.22 at the close of trading, the highest since February 18th, 2011. France’s CAC 40 climbed by 0.3 per cent, while Germany’s DAX gained 0.3 per cent.

“US earnings will probably beat expectations and this should lift European stocks,” said Manish Singh of Crossbridge Capital in London.

Telecom Italia SpA led a gauge of telecommunications companies higher, climbing the most in 2.5 years, after a report that mobile-phone operators discussed sharing their infrastructure across Europe.

Telecom Italia soared 8.8 per cent to €75.7, the biggest rally since May 2010. Deutsche Telekom advanced by 3.4 per cent to €9.14 and France Telecom climbed by 4.3 per cent to €8.75.

Delta Lloyd jumped by 6.6 per cent to €13.71, the largest increase since June 29th, after Aviva sold its 19.4 per cent stake in the Dutch company for €433.8 million.

US

US stocks advanced, snapping a two-day decline for the Standard and Poor’s 500 Index, amid investors’ optimism about fourth-quarter corporate earnings.

Alcoa, the first company in the Dow to report results, rose by 0.6 per cent to $9.15 after it reported better-than-estimated sales.

MGM Resorts International gained 1.2 per cent to $13.11, after MGM China Holdings Ltd, a venture between a daughter of casino mogul Stanley Ho and MGM Resorts International, received formal government approval to build its second resort in Macau.