European equity markets edgy amid concerns over outcome of Ireland’s debt woes

<p>European equity markets struggled to make headway on Wednesday as Ireland’s debt woes and fears of contagion encouraged investors to be cautious. Gains in both […]</p>

European equity markets struggled to make headway on Wednesday as Ireland’s debt woes and fears of contagion encouraged investors to be cautious. Gains in both health care and pharmaceuticals were largely offset by losses in telecoms.

UK markets were also pleasantly surprised by Jobless Claims, which fell in October by 3,500 when expected to increase by 6,000 – suggesting the labour market is heading in the right direction.

Health care stocks were buoyed by positive news for both Galxosmithkline and Actelion
Glaxosmithkline, the UK listed bellwether, added 23p after it was given support by a panel of US experts regarding its new Lupus drug. The 13-2 vote will allow Glaxo to proceed with the planned treatment for Lupus, the first new drug in more than 50 years for the incurable condition whereby the body’s own immune system attacks healthy cells and tissues.

Actelion, the Swiss listed pharmaceutical company, gained 4.5 Swiss Francs after sources mooted that Amgen, the world’s largest biotechnology company, is said to be considering bidding for Actelion.

Other sources of comfort for investors were ICAP and Experian. ICAP the world’s largest interdealer broker, was up around 2% or 9.3p after confirming first-half pre-tax profits had risen by the same amount (2%) to £183mn. Revenues were also up 9% in the same period to £867mn. Experian was the biggest winner on Wednesday, up around 6.3% (or 45.5p), as it too updated the market with better than expected numbers. Experian, the world’s largest credit checking company said increased demand from Latin America had driven first-half profits, which were up 4.4%.

The biggest drag on the FTSE was Vodafone, which was down around -2% (or -3.5p) to 167p after being downgraded by Evolution securities earlier in the day.

3i also struggled after its CEO warned leveraged buyout firms were driving potential targets to ‘extraordinarily’ high prices. 3i, the international venture capital company, was down around -2% (or -6p).

Tomorrow will see the EU and IMF finally addressing Ireland’s troubled banks. Both parties will cast their eyes, and maybe the odd calculator or two, over the accounts of Ireland’s struggling banking sector. Primarily, their prying will assess whether Ireland can stabilise its fragile banking sector without assistance. Although there is no deadline for the outcome of their investigations or discussions, all parties will be looking to reassure investors that all is well sooner rather than later.

Whatever the outcome, investors need clarity and have not been well served by the benign updates regarding the country’s woes. Until an outcome is reached markets may well remain a little edgy.

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