Trading sluggish ahead of Fed report

MARKETS ACROSS Europe ended flat on low volume yesterday as investors awaited the release of minutes from the latest Federal Reserve meeting.

One Dublin broker said there was a lot of speculation among traders that the minutes would hint at more monetary easing.

The dollar rose against the euro and yen as the minutes were released after European markets had closed, showing that “a few” policymakers said the central bank will probably need to take further action to boost the labour market.

The Dublin trader said there was still general nervousness among investors, with the main focus being on the release of China’s GDP results tomorrow.

DUBLIN

IT WAS an uneventful day of trading in Dublin, with the Iseq index of Irish shares up slightly, 0.8 per cent, at the close.

Stock in building materials group Grafton slid 1.44 per cent to €2.73 despite a trading update by the company yesterday which said its group turnover was up 4 per cent to €1.05 billion in the first half of the year.

Turnover in the company’s Irish retailing business, however, was lower, dropping 12.5 per cent, while turnover in its Irish merchanting business was down 9 per cent due to a decline in spending on house repair and maintenance.

The main explorations groups ended on a positive note, with Petroceltic up 11.76 per cent, Ormonde Mining advancing 7.95 per cent, Providence Resources rising 5.26 per cent and Kenmare Resources closing up 1.14 per cent.

Elsewhere, pharma group Elan fell 2.67 per cent to finish at €11.30, while packaging giant Smurfit Kappa was down 1.85 per cent at €5.30.

It was also a bad day for the banks, with PermanentTSB falling 8.33 per cent and Bank of Ireland down 1.06 per cent.

LONDON

MOST UK stocks declined as disappointing company earnings added to signs the global economy is slowing.

Burberry dropped 7.4 per cent to 1,189 pence after Britain’s largest luxury-goods maker reported an 11 per cent increase in first-quarter sales to £408 million.

Aggreko and Johnson Matthey lost at least 3 per cent after US peer Cummins cut its revenue forecast.

ARM Holdings and Aviva paced advancing shares.

Britvic, the maker of Robinsons fruit drinks, plunged 13 per cent to 260.1 pence, the biggest drop since March 2006, after saying full-year results will be “at the bottom end” of analysts’ estimates and that a recall of its Fruit Shoot products will hurt earnings further.

The FTSE 100 was up just 0.41 points overall, less than 0.1 per cent, at 5,664.48, on volume of less than 65 per cent of the 90-day daily average.

EUROPE

MOST EUROPEAN stocks fell before the release of minutes from the latest Federal Reserve meeting, as investors waited for clues about further measures to spur economic growth.

UniCredit and BNP Paribas led bank shares higher. Medical device group Getinge rose 3.9 per cent after saying it expects “significant improvement” in second- half earnings growth.

EON and RWE, Germany’s biggest utility companies, rose after peer Vattenfall filed a legal complaint over the shutdown of nuclear reactors in Germany. Daimler and BMW paced declines in auto companies after US truckmaker Cummins reduced its revenue forecast.

The DAX Index added 0.2 per cent to 6,453.85 at the close in Frankfurt. The broader HDAX Index was little changed.

LVMH, Louis Vuitton Moët Hennessy, the world’s biggest luxury goods company, fell 3.2 per cent to €116.65.

PPR, the French owner of Gucci, also retreated, by 3.5 per cent to €109.50. France’s CAC 40 lost 0.6 per cent

The Stoxx Europe 600 Index dropped less than 0.1 per cent to 255.59 at the close of trading. Two out of three shares on the gauge slid.

NEW YORK

US STOCKS swung between gains and losses before the Federal Reserve report.

Oil led gains in commodities after a drop in inventories and treasuries advanced.

DuPont and Google fell more than 1.8 per cent to pace declines among the largest companies after analysts said they may miss estimates.

Best Buy sank 5.6 per cent after electronics retailer Hhgregg cut its forecasts.

Advanced Micro Devices, a maker of processors for personal computers, also plunged after reporting an unexpected drop in revenue.

Energy companies climbed the most among 10 SP’s 500 industry groups, adding 1.4 per cent, as oil rebounded from the lowest close in more than a week.

Chevron gained 1.3 per cent, while Exxon rose 0.9 per cent.

JPMorgan Chase added 1.1 per cent as financial companies advanced.