Stocks gain on pledge to boost growth

EUROPEAN STOCKS posted their first weekly advance in a month as China pledged to bolster growth and a three-week selloff left the Stoxx Europe 600 index at its cheapest level since January.

Italy’s prime minister Mario Monti’s comments that most EU leaders support joint bonds for the euro area also boosted markets, according to analysts, adding to signs that the euro area will take steps to bolster economic growth.

DUBLIN

THE ISEQ index followed the lead of global trends to end the week in positive territory.

There were few dramatic movers, with many of the big names such as DCC and CRH ending the session fractionally up or down.

Kerry Group was one of the strongest performers, advancing almost 4.5 per cent to €34.16. Heinz, a major customer of Kerry, posted strong fourth-quarter results yesterday, which may have boosted sentiment.

Fellow food stock Aryzta lost ground for most of the day, however, before advancing towards the end of the session to finish unchanged at €37.75.

With third-quarter results on June 5th, analysts noted that the share price usually falls ahead of results.

Ryanair, which announced strong full-year results on Monday but warned of a tougher current year, advanced 1.2 per cent to €4.09.

LONDON

BRITAIN’S BLUE-CHIP index recorded its first weekly gain in a month yesterday but lost momentum and the index closed flat on the day, capped by uncertainty about the euro zone crisis.

The FTSE 100 ended up 1.48 points at 5,351.53 after a choppy trading session, with share price moves exacerbated by light volume at just 75 per cent of its 90-day average.

The index was up on the week after rebounding from a six-month low of 5,253.92 hit on Monday, helped by hopes that Europe was taking new measures to tackle its debt and economic crisis.

However the escalating banking and debt crisis in Spain, polls showing that an anti-austerity party may win the Greek elections and lack of cohesion among European leaders pushed investors to offload their holdings of banking stocks, which fell 0.9 per cent.

Miners and industrial metals stocks also dropped as the market was frustrated at the lack of a decisive policy response in the world’s largest metal consumer, China, which warned it was facing a stern trade environment.

Defensive stocks such as mobile operators performed well, with Vodafone up 0.8 per cent on the day. United Utilities and National Grid both closed up 1.9 per cent.

Some short-term investors were taking advantage of the battered valuations to bet on a brief rebound in the run-up to the Greek elections. “Certain sectors and markets are incredibly oversold,” Andy Ash, head of sales at Monument Securities, said.

“While there is no newsflow , these could have a gentle rally, unwinding what has been quite a violent move, and then we’ll sell them again.”

EUROPE

DRUG-MAKERS AND utilities were among the top gainers as Europe’s top share index closed higher yesterday, albeit in choppy trade and light volumes, as uncertain macro-economic conditions dampened investors’ appetite for risk.

The FTSEurofirst 300 was up 2.36 points, or 0.2 per cent, at 984.97, closing the week higher, having fallen over the last three weeks.

Volumes were just 80 per cent of their already weakened 90-day average, reflecting investors’ downbeat mood, as the index remained near mid-December lows when asset prices were artificially inflated by central bank intervention.

National benchmark indexes advanced in all the 18 western European markets this week except Greece, Spain and Portugal.

France’s CAC 40 gained 1.3 per cent and Germany’s DAX rose 1.1 per cent.

A gauge of banks rallied 2.2 per cent, the biggest advance since March.

KBC Groep, Belgium’s largest bank and insurer, jumped 10 per cent, while Sweden’s Nordea Bank gained 5.7 per cent and UBS increased 4.3 per cent.

US

US STOCKS fluctuated as concern about Spain’s finances tempered optimism with data showing American consumer confidence at its highest since 2007.

Commodity and industrial shares had the biggest declines in the Standard and Poor’s 500 index among 10 industries in morning trade, while telephone and utility companies gained.

Following a two-day advance, Facebook declined 3.4 per cent in morning trade. Google was also down.

The benchmark gauge for US equities is up 2 per cent since May 18th, and was yesterday poised for the biggest weekly rally since March. – (Additional Reporting: Bloomberg/Reuters)