European stock markets open higher after better-than-expected Alcoa results overnight
City Index January 10, 2012 1:30 PM
<p>European stock markets opened to gains of 1% on Tuesday as the FTSE 100, DAX and CAC followed on from a stronger trade in Asian […]</p>
European stock markets opened to gains of 1% on Tuesday as the FTSE 100, DAX and CAC followed on from a stronger trade in Asian markets in the early hours of this morning after miner Alcoa reported stronger than forecast results following the US closing bell last night.
Alcoa is the traditional curtain raiser to the US earnings season and whilst its results are unlikely to set the tone for the entire results period in the US, the fact that it has beaten expectations helps to put European traders on the front foot. Alcoa, the largest US aluminium producer, reported a 6% rise in revenue to $6 billion, beating forecasts of $5.7 billion.
Alcoa’s results are giving a natural lift to key miners on the FTSE 100 this morning, with Vedanta Resources, Antofagasta and Fresnillo all among the top 10 risers in early trade as a result. The FTSE 350 mining sector has seen early gains of 2%, making it the best performing heavyweight sector in London trade.
The FTSE 100 has been in a consolidation pattern for the past four trading days, with the UK Index bouncing a bit like a cork in a bath, and whilst trading has started positively today, the FTSE 100 needs to overcome resistance at 5750 if it is to find upward momentum.
For now however, company earnings and updates both at home and across the pond are giving investors a chance to broaden the gaze of their focus from the sovereign debt crisis, though naturally many a focus remains entrenched in that issue. The meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy failed to really announce anything new yesterday and with Italian and Spanish bond auctions to come later this week, investors continue to trade with a very short term bias.
Marks and Spencer’s shares rally after update
Shares in UK high street retailer Marks and Spencer’s saw gains of 2% on Tuesday after the firm reported a 2.4% rise in group sales excluding VAT, with UK sales rising 1.8% as food sales hit record levels over the Christmas period. The firm warned that profit margin in its clothing range would be squeezed somewhat after giving price discounts to attract shoppers but said that full-year guidance remained unchanged.
Debenhams shares surge 8% after update
Shares in Debenhams charged higher by 8% in trading after the retailer posted a better-than-expected sales performance. Underlying sales (excluding VAT) over the last 18 weeks remained flat when many had expected a fall of 0.9%, boosting shareholder hopes that the firm’s product diversity could keep it challenging on all fronts despite the tough economic conditions.