Saturday 23 September 2017

Market surges defy expectations

John Mulligan

John Mulligan

After expectations of a skittish open, markets surged during the day across Europe.

The gains came as data showed that US manufacturing expanded for the first time in four months and a report reckoned that Spain's troubled banks have a €59.3bn capital deficit. That was slightly less than the €62bn the deficit was forecast to be by the report's authors back in June.

But some investors reckon that the buoyancy displayed by bourses yesterday was relief rather than significant optimism.

"European markets have begun the fourth quarter on a surprisingly positive note," said Nicholas Spiro, managing director of Spiro Sovereign Strategy in London. Andreas Lipkow, an equity trader at MWB Fairtrade Wertpapierhandelsbank in Frankfurt, said markets had overreacted last week and that yesterday's performance marked a correction.

Europe's continuing economic struggle was also underlined in figures that showed the eurozone's unemployment rate remained at 11.4pc in August.

At home, the ISEQ Overall Index failed to join the wider party mood evident at other European indices. It closed the day just 1 point, or 0.03pc higher at 3,279.32.

Exploration

Main movers yesterday included oil exploration firm Providence Resources. It added 1.8pc, or 15.1 cent to €8.60 after weekend reports that Chinese investors are interested in becoming involved with the firm. It had been as much as 5pc higher earlier in the day.

Shares in packaging group Smurfit Kappa advanced 1.4pc, or 11.5 cent, to €7.96, while shares in distribution group DCC rose under 1pc to €22.56 after it completed its acquisition of BP's LPG distribution business in the UK.

Among yesterday's decliners in Dublin were exploration firm Petroceltic, which fell nearly 16pc to 7.5 cent as it continues its merger process with Melrose Resources. Independent News & Media fell 13pc to 12 cent.

National benchmark indices climbed in all of the 18 western European markets. France's CAC 40 rose 2.4pc. The UK's FTSE 100 added almost 1.4pc. Germany's DAX gained just over 1.5pc.

IAG, the parent of British Airways, climbed 3.6pc to 154.3p. Airline body IATA raised its 2012 global airline-profit forecast 37pc as carriers slow capacity growth to cope with fuel prices and waning travel demand.

Air France-KLM, Europe's biggest airline, added 3pc to €5.20, the highest price since February 3.

Credit Agricole rallied 7.4pc to €5.77, the sharpest increase since September 6. France's third-largest bank started talks to sell Emporiki Bank, its unprofitable Greek unit, to Alpha Bank for a token price of €1.

Sportingbet advanced 3.9pc to 53.5p.

Irish Independent

Also in Business