Mixed day for European markets

MARKETS WERE very much a mixed bag across Europe yesterday, although there was some semblance of good news in an IMF proposal to raise $500 billion to boost its lending resources.

“No index was [more than] half a per cent up or half per cent down,” one Dublin trader said.

Dublin’s Iseq index of Irish shares was up almost 0.3 per cent at 2,952.24, meaning it held its own against its European peers.

DUBLIN

Much of the activity was focused on leading stocks, where international packaging group Smurfit Kappa was once again one of the star performers. The stock is enjoying a good run on the back of news of a merger involving two rivals, DS and SCA. It rose 4.3 per cent to close at €5.58. However, dealers suggested its run could run out of momentum over the next few days.

Ryanair began heading back towards €4 as investors decided it has been oversold recently. It ended the day at €3.964, an increase of 2.56 per cent.

The market’s biggest stock, international building materials group CRH, held up well, adding 1.28 per cent to close at €15.40.

There were plenty of sellers of titanium miner Kenmare in the market yesterday. It shed 1.96 per cent to close at 55 cent.

Exploration group Tullow Oil issued a management statement that was regarded as disappointing. It dropped 4.86 per cent to close at €16.65.

LONDON

British stocks advanced, sending the FTSE 100 index up 0.2 per cent to 5,702.37 at the close in London, its highest in more than 10 weeks.

Man Group gained 6.8 per cent as the hedge fund manager announced cost cuts. Essar Energy rallied 7.2 per cent to 136.2 pence. The shares plunged 26 per cent on Tuesday after India’s supreme court overturned a ruling that allowed the company to defer payment of sales tax.

Weir Group, a Scottish maker of pumps and equipment for mining companies, dropped 3.6 per cent to 2,025 pence. The shares fell as US-based rival SPX forecast 2012 profits that trailed analysts’ estimates.

EUROPE

Most European stocks rose as the IMF said it plans to raise as much as $500 billion to expand its lending resources and Greece neared a debt deal with its private creditors.

Accor advanced 4.3 per cent as the French hotelier said sales increased in 2011 and confirmed its profit forecast.

Commerzbank slipped 1.7 per cent as Moody’s Investors Services lowered the financial-strength rating of Germany’s second biggest lender.

The Stoxx Europe 600 index gained less than 0.1 per cent at the close of trading, extending a five-month high. More than three shares climbed for every two that dropped. The benchmark gauge has increased 3.7 per cent so far this year.

“The rumours from the IMF about an increase in lending may have helped to spur markets,” said Chris Beauchamp, a market analyst at IG Index in London. “It is only a proposal, not a concrete decision.”

The IMF aims to increase its resources to safeguard the global economy after identifying a potential need for $1 trillion in financing in coming years, an IMF spokesman said in a statement.

Intermediate Capital Group, a debt provider for leveraged buyouts, soared 6.1 per cent to 266 pence.

Cinven, the British buyout firm that owns the Pizza Express restaurant chain, agreed to buy Intermediate Capital’s patents business CPA Global for £950 million.

ThyssenKrupp slipped 1.6 per cent to €19.98.

Veolia Environnement sank 5.5 per cent to €8.14 and Suez Environnement dropped 2.6 per cent to €9.14. The utilities face a formal probe by EU anti-trust regulators into possible collusion to fix the price of water and wastewater services in France.

US

US stocks advanced, sending the Standard Poor’s 500 index to its highest level since July as confidence among homebuilders topped economists’ forecasts and Goldman Sachs Group jumped after its earnings report.

Goldman Sachs surged 6.5 per cent as profit beat analysts’ estimates amid lower compensation costs.

PulteGroup and Lennar both added at least 3.6 per cent while pacing an advance in homebuilders.

Bank of New York Mellon fell 4 per cent to $20.42. The world’s biggest custody bank said fourth-quarter earnings declined 26 per cent on a restructuring charge and lower revenue from businesses tied to financial markets.

Target slipped 0.9 per cent to $49.41. The second largest US discount retailer temporarily suspended the planned sale of its credit card portfolio and agreed to pay JPMorgan Chase $2.8 billion to retire 2008 financing.

At least 48 companies in the SP 500 are scheduled to report quarterly results this week. – Additional reporting: Bloomberg/Reuters