Stocks up on US optimism on fiscal cliff

European stocks made some ground yesterday as there were signs that the US can avoid enforced tax increases, spending cuts and deficit reduction – the so-called fiscal cliff – next year.

DUBLIN

The Irish market performed in line with Europe, with some of the bigger players advancing yesterday.

Packaging group, Smurfit Kappa, gained 2.25 per cent to close at €9.10 after announcing that it is entering Europe’s Stoxx 600 index next month. The move means that funds which track the benchmark will have to buy Smurfit shares.

Index heavyweight, international building materials group, CRH, added 0.69 per cent to close at €13.865. The stock outperformed the market and its peers for most of the day.

Dealers singled out Bank of Ireland for special mention yesterday after it added 4.85 per cent to close at 10.8 cent. Over 43 million of its shares were sold in Dublin yesterday. Traders said recent positive news from the Republic drove interest in the bank.

Food group Glanbia slipped 0.75 per cent to €7.96 after almost 82 per cent of its co-op members voted in of its share spin out and sale plan.

LONDON

Irish titanium miner, Kenmare Resources, slumped 7.7 per cent to 30.9 pence after saying that power disruptions at its Mozambique mine will hit full-year production there.

OAO MegaFon slipped 2 per cent to $19.60 on its first day of trading in London after Russia’s second-largest mobile-phone operator raised $1.7 billion in the biggest initial offering by a Russian company in three years.

Talvivaara Mining tumbled 4.9 per cent to 94.5 pence. The Finnish nickel company cut its annual production target by 24 per cent after authorities ordered it to halt output for more than two weeks.

Marks & Spencer advanced 2.2 per cent to 387 pence as a lower pension deficit and reduced funding costs fuelled renewed takeover speculation. The pension shortfall was £290 million sterling as of March 31st, down from £1.3 billion in 2009.

EUROPE

Moves by closely-held German investment house, Franz Haniel, hit the prices of two stocks.

Celesio retreated 2.6 percent to €12.94 euros after Hanielsold over €100 million of stock in the drug wholesaler.

Haniel also said it would cut its stake in Metro to 30 per cent from 34.2 per cent, driving the price of Germany’s biggest retailer down by 3.7 per cent to €21.32. Haniel is also raising €150 million through the sale of non-strategic assets.

Swiss Life decreased 1 percent to 124 Swiss francs as Switzerland’s biggest life insurer said it wrote down the value of its AWD Holding AG unit by 576 million francs, well above the average estimate of 463 million francs.

Banco Popolare SC dropped 4.1 per cent to €1.09 after Moody’s Investors Service said it will review the ratings of Italy’s fourth-biggest bank by assets for a downgrade.

Banco Popular Espanol SA surged 9.1 per cent to 62.6 cents.

The lender said Allianz SE, Americo Amorim, Banque Federative du Credit Mutuel and Union Europea de Inversiones have exercised their rights to buy new shares in a capital increase.

NEW YORK

US stocks rose after President Barack Obama and speaker of the house, John Boehner, signalled that they are nearing agreement on the fiscal cliff.

Costco advanced 5.7 per cent for the biggest gain in the SP 500 to $102. The largest US warehouse-club chain said it plans to pay shareholders a special dividend totalling about $3 billion.

JC Penney rallied 4.5 per cent to $18.30 as consumer stocks rallied. Coach also gained, rising 3.5 per cent to $59.66, as discretionary companies jumped 0.8 per cent. Wal-Mart stores added 1.8 per cent to $70.75, as staples companies rose 0.8 per cent. – (Additional reporting: Bloomberg)