LONDON/Dubai: European shares found firmer footing yesterday, having tumbled lower in the previous session after the inconclusive Italian election, as investors used the opportunity to buy back in on beaten down assets. The FTSEurofirst 300 closed up 10.33 points, or 0.9 percent at 1,160.58, led by strength in benchmark indexes in Italy and Spain, which had fallen 4.9 and 3.2 percent, respectively, on Tuesday after the election stalemate renewed concerns about the euro zone’s future.
“There’s a lot of money ready to go in on the dips and people do tend to invest by looking in the rear-view mirror and there’s nothing that increases confidence more than a market that has performed well,” Peter Clark, chief investment officer at Igenious Asset Management, said.
Data on US housing and durable goods added to bullish sentiment in stocks. The US benchmark S&P 500 was up more than 1 percent. Bernanke’s comments came in his second day of testimony in Congress. His defence on Tuesday of the Fed’s monetary stimulus, which eased worries over a possible early retreat from its policy of bond purchases, helped US stocks rebound from their worst decline since November. On Wall Street, the Dow Jones industrial average was up 127.05 points, or 0.91 percent, at 14,027.18. The Standard & Poor’s 500 Index was up 14.72 points, or 0.98 percent, at 1,511.66. The Nasdaq Composite Index was up 32.36 points, or 1.03 percent, at 3,162.01.
US economic data also underpinned the market, with durable goods orders excluding transportation increasing 1.9 percent, the largest gain since December 2011, and well above economists’ expectations of a 0.2 percent gain. Another report yesterday showed that contracts to buy previously owned homes approached a near three-year high last month
Egypt’s bourse fell to a fresh four-week low as political tension from opposition boycotting upcoming parliamentary elections weighed on investors sentiment, while most Gulf markets recovered losses from the previous session. Cairo’s index slipped 0.6 percent to its lowest close since January 29. In Saudi Arabia, the measure gained 0.2 percent, recovering from a three-week low.
Large-caps gained with Al Rajhi Bank up 0.4 percent, Saudi Basic Industries Corp (SABIC) gaining 0.3 percent and SABB rising 1.2 percent.
A recovery in oil prices helped sentiment in the largest exporting Opec member. Brent crude traded near $113 a barrel on Wednesday, edging up from a one-month low.
UAE investors shifted focus to Abu Dhabi banks, which are set to pay the strongest dividends in the country. First Gulf Bank rose 4.2 percent; the lender will pay a 0.8 dirham cash dividend early next month. Abu Dhabi Commercial Bank gained 3.3 percent.
Abu Dhabi’s index climbed 1.7 percent, up for a fifth session in the last six and reaching its highest close since November 2009.
Dubai’s Emaar Properties led the rally on that bourse, rising 1.8 percent. Buyers returned after Tuesday’s 2.5 percent loss on a dividend disappointment. “Yesterday’s drop happened on tiny volumes - that means investors remain bullish on the stock,” Abu Shakra said. The emirate’s benchmark closed 0.7 percent higher, extending 2013 gains to 19.5 percent. Qatar’s measure fell 0.9 percent to its lowest close since January 2. Reuters
