Positive data sees most markets gain

POSITIVE data from the US, Britain and Germany — pointing to some level of economic upswing — boosted markets, yesterday, with most starting the year with good gains.

Despite a marginal increase in December’s jobless figures, Germany’s unemployment rate fell from 7.7% to 7.1% in 2011, according to fresh figures. Meanwhile, latest data from the US shows that its manufacturing sector grew at its fastest rate for six months in December, further tentative proof of the American economy gaining positive momentum.

In Frankfurt, the DAX was up by 1.5%, or 91 points, at 6,163 points.

While hit in earlier trading, due to speculation about possible downgrades of France’s triple-A credit rating, Paris’ CAC-40 index closed the day up by 0.7% at 3,245.40 points.

Positive British manufacturing data for December boosted the FTSE-100 to a two-month high; with the market closing up by 2.3% at just under 5,700 points. This came despite separate data showing that confidence levels amongst British firms plunged to their lowest level for three years, last month.

Meanwhile, despite Ireland showing one of the less impressive monthly manufacturing indexes — with the sector still in decline in December — the ISEQ still managed an impressive 2% increase, yesterday, buoyed by particularly strong gains for the likes of CRH, FBD Insurance, Tullow Oil, Paddy Power, Smurfit Kappa Group, Kerry Group, DCC and Icon.

Kingspan — which is being linked to expansion in Germany — saw its share price shoot up by 3%, or 19c, to €6.55. Ireland’s two airline stocks also showed good gains — Aer Lingus up by nearly 4% to 66c and Ryanair up by 4.2%, or 15c, at €3.78.

In the US, meanwhile, the S&P-500 was up by over 1.8% in early trading, while the Nasdaq and the Dow Jones were each up by around 1.75%. In earlier trading, the two big Asian markets — the Nikkei in Tokyo and Hong Kong’s Hang Seng — showed a return to meaningful growth, the latter rising by 2.4% and the former by a more modest 0.7%.

“The new year has bearish expectations for growth baked in, providing an equity-buying opportunity for investors as growth improves later in the year. The market will focus on improving growth, increasing profits, low interest rates benefiting businesses and investors will see equity as a more attractive alternative than holding cash,” the Bloomberg news service quoted Daniel Weston, a portfolio adviser at Munich-based Schroeder Equities, as saying.

London-based Deutsche Bank strategist, Jim Reid said: “US data has continued to impress and markets are expecting the trend to persist.”