European stocks push higher on US data

European stocks advanced on Thursday on positive US economic data although the mining sector suffered after Rio Tinto announced a shock US$14-billion (10.5-billion-euro) write-down that sparked the resignation of its boss.

London's FTSE 100 index of leading companies rose 0.46 percent to 6,132.36 points and Frankfurt's DAX 30 gained 0.58 percent to 7,735.46 points.

In Paris, the CAC 40 jumped 0.96 percent to 3,744.11 points, winning a boost from strong earnings from supermarket giant Carrefour and European airliner group Airbus.

The European single currency meanwhile advanced to $1.3355 from $1.3286 late in New York on Wednesday. On the London Bullion Market, gold prices slid to $1,675 an ounce from $1,676.25.

"Indices pushed higher in afternoon trade, taking their lead from positive macro data out of the US at lunchtime," said CMC Markets UK trader Matt Basi.

US new housing starts jumped by 12 percent in December to their highest level since 2008. For 2012 overall they soared by 28 percent.

The figure "is positive news for the American economy," said Thomas Julien, an economist at Natixis investment bank.

He said it showed "the recovery of property market is clearly getting stronger," and that he expected a similar rise in housing starts this year.

New US jobless claims also dropped last week to 335,000, the lowest level in five years.

Earlier in the day, sentiment had been hit by the resignation of Rio Tinto CEO Tom Albanese after the Anglo-Australian mining giant announced a $14-billion write-down on its Mozambique coal assets and ailing aluminium business.

Rio warned it expected non-cash impairments of $10-11 billion mostly related to the 2007 purchase of aluminium firm Alcan, and $3 billion relating to its Mozambique coal project acquired in 2011, in annual results due on February 14.

In reaction, Rio Tinto shares slid 0.53 percent to 3,439.5 pence. The group added that Albanese has been replaced by iron ore boss Sam Walsh.

The news also weighed on the broader sector. Anglo-Swiss miner Xstrata shed 0.39 percent to 1,138.00 pence and Anglo American gave up 0.47 percent to 1,892 pence.

Across in Paris, supermarket giant Carrefour saw its share price rocket 6.1 percent to 20.50 euros, topping the CAC 40 leaderboard after posting strong fourth-quarter sales.

The aviation sector also flew into focus, with EADS shares soaring 3.9 percent to 33.70 euros in Paris, after its European airliner division Airbus published impressive sales.

Analysts said the stock gained support also from prospects that Airbus could win new orders after global aviation agencies and airlines grounded US rival Boeing's Dreamliner jets.

Airbus "delivered more planes than expected, stoking optimism about a growing order book," noted CMC Markets analyst Michael Hewson.

"While there was some downside with lower-than-expected sales of the A380 there is also optimism that the company may benefit from Boeing's current problems even though it has had its own problems with micro-cracks in the wings, which appear to be behind them now," he added.

Asian equities diverged on Thursday, with Tokyo ending flat after a seesaw session that saw parts suppliers hit by the Dreamliner news.

US stocks pushed higher on the positive data, with the Dow Jones Industrial Average up 0.50 percent to 13,579.21 points in midday trade.

The broad-based S&P 500 gained 0.51 percent, to 1,480.12 points, while the tech-heavy Nasdaq Composite rose 0.56 percent to 3,135.13 points.

The rise in US stocks came despite disappointing bank results, with Bank of America seeing its shares fall 3.6 percent after its fourth-quarter net earnings tumbled by 63 percent to $367 million due to the cost of a settlement over mortgage practices.

Citigroup fell 3.0 percent after a 25-percent gain in earnings disappointed markets, with its bottom line also hit by mortgage business charges.

Boeing shares lost another 0.2 percent after its 787 was grounded worldwide for safety inspections.

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9286-0.0079-0.84%
    AUDUSD=X
    0.5534-0.0032-0.58%
    AUDGBP=X
    0.6722-0.0062-0.91%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg