Hopes of US budget deal boost stocks
Published 20/11/2012 | 05:00
IRISH shares rose in tandem with their counterparts elsewhere as US President Barack Obama expressed confidence that he will strike a deal with Congress on a new budget to avoid the so-called fiscal cliff.
The benchmark ISEQ Overall Index jumped 41.7 points, or 1.3pc, to 3219.77 – the first time it closed higher in four sessions. Among the biggest gainers were Smurfit Kappa and CRH which depend on the global economy for profits.
Smurfit closed up 5.4pc at €8.40 while CRH ended the session 2.4pc higher at €13.93. The building materials company was raised to 'hold' from 'reduce' at Numis.
FBD Holdings, the only insurance company on the Dublin bourse, soared 4.9pc to €9.85 after saying performance so far this year exceeded market guidance, driven by the underwriting business.
Elsewhere, it was a similar picture. Global stocks snapped the longest losing streak in almost a year amid optimism a deal can be reached to avoid automatic US spending cuts and tax increases.
The MSCI All-Country World Index advanced 1.8pc during afternoon trading in New York, ending an eight-day decline, and the Standard & Poor's 500 Index jumped 1.6pc for its biggest gain in two months.
"This is good news and a relief," said Bruno Ducros who helps oversee about $3.9bn in equities at CamGestion in Paris. "The risk of a very strong slowdown in the US had scared the market. It was a negotiation game before the election. Now, both sides are ready to agree."
HSBC added 3.8pc after the London-based bank said it has held talks to sell its stake in Ping An Insurance. BP gained 3.6pc following a report that the oil company plans a £3.7bn buyback. ING advanced 3.7pc after the European Commission granted it more time to sell its insurance operations in the region.
SAS soared 23pc after the airline won the backing of all eight of the unions that represent its employees to cut jobs and shrink the business. Scandinavia's biggest airline seeks to extend credit lines and cut costs.
Nokia surged 9pc after the company said it received reports that its new Lumia 920 smartphone had sold out in many shops in Germany.