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Fiscal cliff hopes drive EU stocks.

Byline: ANNABELLE DICKSON

EUROPEAN stocks climbed yesterday, buoyed by hopes a deal will be found to avert the US fiscal cliff of automatic tax increases and spending cuts.

London's FTSE 100 Index closed up 23.7 points to 5935.9, while the City's second tier market, the FTSE 250, which has been steadily making gains this month, reached an all time high of 12293.2. The German DAX also peaked, reaching its highest level since 2008.

The Dow Jones Industrial Average opened higher amid signs that some of the uncertainty hanging over the global economy will be removed.

Reports suggest that progress is being made towards a package of at least one trillion US dollars worth of both new taxes and fresh spending cuts, alongside a rise in America's debt ceiling.

The pound was down against the euro at 1.23 after Greece raised 1.3 billion euros (PS1 million) in a three-month treasury bill auction with demand to spare. It was up against the US dollar at 1.63.

Further signs that China's economic recovery is gaining traction also lifted markets, with mining stocks among those on the front foot.

Rio Tinto set the pace with a gain of 3%, up 98p to 3568p, while Vedanta Resources cheered by 28p to 1143p.

Security group G4S joined them on the FTSE 100 Index risers board after it emerged that it had been selected by the Department for Work & Pensions to compete for call centre services to support the Government's child maintenance service.

The announcement reassured investors that G4S will not be blacklisted from public sector work after this summer's Olympics security fiasco.

In addition, the company beefed up its board with three new non-executive directors, including ITV chief executive Adam Crozier. Shares were 2.7% higher, up 6.7p at 257p.

Leisure group Whitbread, which trades as Premier Inn and coffee chain Costa, was 2% stronger - 46p to 2465p - after it secured a PS19.6 million profit on the sale and leaseback of seven properties.

Temporary power specialist Aggreko also recovered from yesterday's warning that 2013 results will not match this year's performance, when it benefited from PS100 million of revenues from one-off events such as the Olympics. Shares fell 22% yesterday before recouping 40p or 2.4% to stand at 1704p.

There was no such recovery for Vodafone, which fell for a second successive session amid fears it will have to pay more than forecast in the auction of the 4G spectrum in the UK.

This followed higher-than-expected returns from the equivalent sale in the Netherlands.

Shares were off 2p to 156.3p.

In corporate results, voucher and gift card company Park rose 6.5% after it posted a 2% rise in half-year revenues and said its pre-tax loss narrowed to PS4.1 million over the seasonally-quieter period.

With orders well ahead of the equivalent period last year, shares were 3.5p higher at 57p.
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Title Annotation:Business
Publication:Daily Post (Conwy, Wales)
Date:Dec 19, 2012
Words:486
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