Wednesday 13 December 2017

Bourses gain on debt-crisis moves

Workers hang the sign 'Welcome to BNP Paribas' on a building in Brussels city center (DOMINIQUE FAGET/AFP/Getty Images)
Workers hang the sign 'Welcome to BNP Paribas' on a building in Brussels city center (DOMINIQUE FAGET/AFP/Getty Images)

Thomas Molloy

SHARES in Ireland and elsewhere in Europe advanced for the first time in four days amid speculation policy makers are examining measures to shield banks from the region's sovereign-debt crisis.

The ISEQ Overall Index jumped 50.67 points, or 2.1pc, to 2,480.79 as heavyweights such as CRH and Kenmare gained.

The building materials company soared 5.6pc to €11.95 on optimism that recent declines were overdone.

Kenmare soared 6.6pc to 38.8 cent as resources stock rallied. Bank of Ireland advanced 10pc to 8.2 cent as banks across the continent recovered after France and Belgium said a "bad bank" would be set up to hold Dexia's troubled assets.

Benchmark indexes rose in all 18 western European markets, with the exception of Iceland.

The DAX climbed 4.9pc in Frankfurt. France's CAC 40 rose 4.3pc and the UK's FTSE 100 advanced 3.2pc.

BNP Paribas and Societe Generale, France's biggest lenders, climbed more than 8pc. Rio Tinto Group led mining companies higher.

"It seems politicians behind the scenes are making a determined effort to get more ahead of the curve dealing with the euro debt crisis," said Witold Bahrke, a Copenhagen-based senior strategist at PFA Pension.

"Politicians may be moving closer to securing a recapitalisation of banks and a more drastic solution on Greece."

Signs that the debt crisis is hampering growth have prompted speculation the ECB will lower borrowing costs at a policy meeting today.

Eleven of 52 economists surveyed by Bloomberg say it will cut its benchmark interest rate by at least a quarter-percentage point from the current rate of 1.5pc. The others expect no change.

Dexia rose 1.3pc after a 34pc tumble over the previous four days. Belgium's biggest bank plans to pool its troubled assets into a "bad bank" with Belgian and French government guarantees to protect depositors and its municipal-lending business.

Axa, Europe's second-biggest insurer, gained 8.8pc after the company reiterated its earnings target and said the balance sheet remained solid.

The insurer still expects 10pc annual growth in per-share operating earnings through 2015, the company said in a presentation on its website.

Basic resources shares jumped 5.8pc for the second-biggest gain among the 19 industry groups in the Stoxx 600. Rio Tinto, the world's second-biggest mining company, rallied 7.1pc and BHP Billiton gained 6.7pc.

Cap Gemini jumped 14pc, the biggest gain since 2003. Europe's largest computer-services company hasn't yet seen significant spending cuts from clients and still expects full-year revenue growth of 9pc to 10pc, chief executive Paul Hermelin said.

J Sainsbury, the UK's third-biggest supermarket company, climbed 3.6pc after saying that second-quarter sales rose at the same pace as the first three months of the year as shoppers bought more of its own-brand food ranges. (Additional reporting Bloomberg)

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