Gains pared on news of referendum

THE DUBLIN market performed well yesterday until about 3pm, when news broke that Ireland was to have a referendum on the European Union’s fiscal compact.

The main stock on the exchange, buildings group CRH, performed well on the day. Its figures, released yesterday, were in line with market expectations but what pleased the market most was the group’s view on its prospects for 2012.

DUBLIN

THE HEAVIEST volumes were in the two stocks that issued results, while trading in other shares on the exchange was light.

CRH announced that pre-tax profits rose by 33 per cent in 2011, to €711 million, up from €534 million the previous year.

The stock closed the day at €15.79, a drop of 2.26 per cent. Traders said the fall in the stock’s value was understandable given the strong run CRH has had recently.

Unlike CRH, Aer Lingus, in its guidance to the markets, pulled back on earlier predictions for 2012, pointing the finger at the rising price of oil. The airline announced pre-tax profits of €84.4 million for last year, up from €27.2 million in 2010. However, the stock closed at 0.87, a fall of 7.45 per cent.

The drain of oil prices on the profitability of airlines had less effect on Ryanair. It closed at €4.10, a rise of 1.46 per cent.

Kingspan did well yesterday again, on the back of the good figures it announced on Monday. The stock closed at €8.13, a rise of 0.99 per cent.

LONDON

THE FTSE 100 crept into positive territory, with miners tracking metal prices higher as the anticipation of cheap European Central Bank loans flooding the financial system boosted the outlook for raw materials demand and for lending.

London’s blue-chip index closed up 12.36 points, or 0.2 per cent, at 5,927.91, as gains were capped after weak economic data from the US showed the world’s biggest economy began 2012 on a slightly weaker note.

Banks were higher, although there was a note of caution after the downgrade of Greece to selective default by credit rating agency Standard Poor’s.

FTSE 100 volume was thin at just 85 per cent of the 90-day average, meaning fund managers remained cautious about global economic conditions and were unwilling to commit fresh money to a market that has rallied some 15 per cent from November lows.

British housebuilder Persimmon leapt 12.7 per cent after it unveiled plans to return £1.9 billion of surplus cash to shareholders as it posted a slightly stronger than expected jump in full-year profit.

Other housebuilders were also in demand led by Taylor Wimpey, ahead 6 per cent.

Whitbread dropped 0.6 per cent as the hotels and leisure group issued a mixed trading update, highlighting a slowing in fourth-quarter sales growth.

EUROPE

EUROPEAN SHARES edged up as investors braced for the next round of the European Central Bank’s injection of cheap cash for banks, a major factor in driving the market’s rally in 2012.

Strategists said equities will benefit further from the funding move, and that European stocks exposed to the US economy may gain.

Europe’s banks were expected to take in another half trillion euro in three-year loans offered by the ECB today in a bid to inject liquidity into the fragile banking system.

The FTSEurofirst 300 index of top European shares rose 0.2 per cent to close at 1,076.12 points and is up 7.5 per cent in 2012.

Volume was low, at 82.5 per cent of the index’s 90-day average.Miners were among the gainers, as copper prices rallied to a more than two-week high. The prospect of LTROs, providing stimulus, and the euro remaining close to a three-month high against the US dollar, boosted metals prices.

The STOXX Europe 600 Basic Resources Index rose 0.9 per cent.Other cyclical sectors to gain included autos, up 0.7 per cent, and more than 30 per cent higher so far in 2012. Euro zone banks edged up 0.2 per cent.

The euro zone’s blue-chip Euro STOXX 50 index, up 0.3 per cent at 2,519.72 points, was at the verge of a bullish technical signal known as a golden cross, with its 50-day moving average about to break above its 200-day average.

US

STRONG US consumer confidence fed a rally on Wall Street, pushing the SP 500 beyond 1,370 points, while the euro climbed in anticipation of cheap cash to be injected by the European Central Bank.

Oil prices edged lower for a second day after Monday’s correction, which snapped a week-long rally.

Consumer confidence in the world’s largest economy rose to a one-year high in February, according to a survey that took into account optimism about the labour market versus concerns over rising gasoline prices. – (Additional reporting Reuters)