European values rise on strong data

STOCKS ROSE in key European markets on the back of good corporate news and positive employment data from the US.

Claims for unemployment benefits in the US declined last week to the lowest level in a month, easing fears that employment growth is faltering.

First-time claims dropped by 1,000 to 367,000 in the period ended May 5th, Washington’s Labor Department indicated.

“The health of the labour market is improving,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh, Pennsylvania.

Mr Hoffman is regarded as one of the most accurate forecasters of the US jobs market.

DUBLIN

One institutional investor plunged for 2.2 million shares in DIY and builders’ merchant group Grafton, after the company told shareholders that sales in the first four months of the year rose 5.3 per cent to €676 million.

In a statement released ahead of its annual general meeting in Dublin, Grafton said profits were also ahead of the same period last year.

More than 3.5 million shares in the group changed hands in Dublin, 10 times the average. The stock closed 0.91 per cent down at €3.17, but traded as low as €3.15 earlier in the day.

Dealers said that the buyer of the 2.2 million block was an institutional investor. The identity is likely to be revealed in coming days as the buyer will have to report the transaction to the market.

Insulation specialist Kingspan also held its annual general meeting. It reported sales up 8 per cent in the four months ended April 30th to €473 million. Its shares added 1.64 per cent to close at €7.65.

Elsewhere, Dragon Oil bounced back after losing ground earlier in the week. The stock finished 2.16 per cent ahead at €7.

International packaging group Smurfit added 2.37 per cent to close at €6.52.

The Irish market’s biggest stock, international building materials group CRH, ended the day 1.09 per cent ahead at €14.445.

LONDON

A bounce-back by risk-sensitive banks and commodity stocks and the positive jobs news from the US hauled Britain’s stock index higher.

Movements by miners clearly illustrated the roller coaster session for the blue chips. Having been the main prop for an early rise by the FTSE 100 index, the sector soon dropped back mirroring copper as data out of top metals consumer China showed headline growth in imports unexpectedly stalled last month.

The news sparked speculation that China may take action to spur its economy forward over coming months.

Lloyds Banking Group jumped 4.3 per cent to 31.2 pence, rebounding from yesterday’s biggest two-day selloff since November. Barclays rallied 3.2 per cent to 208.8 pence, snapping a five-day selloff, and Royal Bank of Scotland Group advanced 1.9 per cent to 23.05 pence.

Consumer goods group Reckitt Benckiser was a big individual FTSE 100 faller, off 3.5 per cent after the firm’s main shareholder, JAB Holdings, said it was cutting its stake in the group to about 10.6 per cent

EUROPE

European stocks rose, erasing an earlier decline, as companies from Deutsche Telekom AG to Repsol YPF SA posted better than estimated quarterly profit.

Deutsche Telekom climbed 3 per cent to €8.80. Europe’s second-largest telephone company reported first-quarter earnings before interest, taxes and depreciation that slipped 0.1 per cent to €4.48 billion. The average forecast of 21 analysts surveyed by Bloomberg had called for €4.4 billion of profit on that measure.

Separately, the firm was said to discuss a merger of its T-Mobile USA unit with MetroPCS Communications. Deutsche Telekom has considered a stock-swap deal that would give it control over the combined entity, said two sources who declined to be identified.

Repsol YPF rallied 8.2 per cent to €14.21, its largest gain in two years. Spain’s biggest oil company beat analyst estimates for first-quarter earnings, posting profit of €792 million as higher oil prices buoyed income from its drilling and production operations.

UniCredit SpA gained 6.8 per cent to €2.84. Italy’s biggest bank said first-quarter profit rose 13 per cent to €914 million as higher trading income more than offset a drop in fees and lending.

Banco Santander SA, Spain’s largest lender, increased 6 per cent to €4.92. Deutsche Bank AG, Germany’s biggest bank, gained 2.7 per cent to €31.23.

US

US stocks rose. JPMorgan Chase and Citigroup added more than 1 per cent to pace gains in financial shares. Monster Beverage surged 12 per cent after the energy-drink maker’s earnings beat estimates.

Cisco Systems slumped 9.5 per cent as sales and profit forecasts trailed analysts’ projections. – (Additional reporting: Bloomberg, Reuters)