European stocks rebound after retreat

EUROPEAN equities rebounded yesterday, as investors saw value after a steep retreat to a five-month lows and G8 leaders vowed to combat financial turmoil and avoid a disintegration of the euro zone. Markets were also buoyed by China’s pledge to boost growth.

However, analysts described the gains as a “dead cat bounce”, the phrase used to describe a temporary upward movements in equities that lack the conviction of a genuine rally and usually accompanied by below-average volumes.

In New York, Facebook slumped below its issue price of $38.

DUBLIN

THE ISEQ finished 0.6 per cent higher, with much of the day’s trading activity relating to index heavyweight Ryanair, which posted record results but warned about the impact of higher fuel costs. The stock closed up 0.4 per cent in Dublin at €4.04, having spent most of the session in negative territory, but climbed in line with the rest of the market towards the end of the session. The Iseq’s second airline stock, Aer Lingus, posted a 0.5 per cent rise to 99 cent.

Elsewhere, building materials group CRH, industrial holdings company DCC and drinks group C&C all managed modest advances as buyers came into the market late in the afternoon.

However, food group Kerry was down 1 per cent at €33.14, while paper and packaging company Smurfit Kappa fell 2.6 per cent to €5.55.

LONDON

AMID A cautious mood, the FTSE 100 blue-chip index rose 0.7 per cent, ending a run of five consecutive declines that had seen the gauge slump 5.5 per cent last week – its biggest weekly drop since September.

Vedanta Resources posted the biggest gain in the FTSE 100, leading mining shares higher. Copper producer Vedanta jumped 5.2 per cent to 1,008 pence. The metal advanced for a second day amid speculation Chinese premier Wen’s pledge to bolster growth would also increase demand for commodities from the world’s biggest consumer of industrial metals.

Man Group, the world’s largest publicly traded hedge-fund manager, jumped 4.7 per cent to 78.8 pence after agreeing to buy FRM Holdings, which oversees about $8 billion, to expand its unit that invests in other hedge funds.

Barclays advanced 2.2 per cent to 180 pence. The UK’s second-largest bank by assets will sell its 19.6 per cent stake in BlackRock for $6.1 billion. British Land rose 1.4 per cent to 495.6 pence, as the real-estate investment trust raised its quarterly dividend for the first time in three years and said it would stay at that level in the coming fiscal year.

Sportingbet slumped 7.1 per cent to 26.25 pence, a 3½ year low, after the online gambling company said it was in talks with Spain’s authorities about a potential tax liability.

EUROPE

As bargain hunters came out to snap up equities, the Stoxx Europe 600 Index gained 0.5 per cent to 240.17 at the close in London, recouping some of last week’s 5.2 per cent drop.

National benchmark indexes climbed in 12 of the 18 western European markets. Germany’s Dax was the star performer, rising almost 1 per cent, while France’s Cac-40 rose 0.6 per cent. Italy’s FTSE MIB lost 0.3 per cent.

Carmakers paced advancing shares as analysts recommended the Paris-listed Renault and Milan’s Fiat. Renault soared 4.7 per cent to €32.02 as analysts at UBS added the French carmaker to its “key calls” list, while Fiat climbed 8.6 per cent to €3.64, the biggest gain in more than two months, as Sanford Bernstein upgraded the car maker to “outperform”, the equivalent of a buy recommendation.

Carlsberg, the world’s fourth-biggest brewer, dropped 5.9 per cent to 458.90 Danish kroner after ING advised investors to sell the stock, saying there had been too much focus on the positive aspects of the drinks group’s first-quarter earnings and not enough focus on threats to its market position in Russia.

Banco Popolare surged 19 per cent to 1.04 cent, the biggest jump since at least July 2007, as analysts from Bank of America to Exane BNP Paribas upgraded the shares after Italy’s fourth-biggest bank said regulatory approval to use internal risk models boosted its Tier 1 capital.

NEW YORK

STOCKS ROSE in early trading in New York, sending the Standard and Poor’s 500 Index toward its biggest gain in about a month.

However, Facebook, the social networking site that raised $16 billion in its initial public offering, tumbled 9.2 per cent to $34.71 – below its offer price of $38.

Elsewhere, Apple, the world’s most valuable company, rallied 4.3 per cent to $553.14, while Boeing jumped 3.3 per cent to $71.43 and Yahoo! advanced 0.8 per cent to $15.54. Avon retreated 1.2 per cent to $16.75. The world’s largest door-to-door cosmetics seller was downgraded to sell from neutral by UBS analysts. - (Additional reporting: Bloomberg / Reuters)