Barrels outside the Diageo Shieldhall facility near Glasgow, Scotland. The company is among multinationals doing well because their earnings are more broadly focused. Photo by Reuters.
Multinational listed global companies are leading a revival
in world sharemarkets this week, Craigs Investment Partners
broker Chris Timms says.
Despite the gloom in Europe and concerns over whether the
United States Congress will reach agreement on the looming
debt ceiling, sharemarkets have shrugged off some of the
doubts, he said yesterday. European shares edged up
yesterday, moving back towards their recent
near-two-year-high. Traders said the longer-term outlook
remained bullish for European markets, even as some key
indices fell back from technically ''over-bought'' levels.
The pan-European FTSEuro-first 300 rose to 1165 points,
heading back to the 1170 it reached earlier this month, its
highest level since early March 2011.
US markets were closed for the Martin Luther King holiday but
expectations a political deal would be reached in the US to
raise the country's debt ceiling helped investor confidence.
The Republican Party said it would seek to pass a three-month
extension of federal borrowing authority next week.
Britain's FTSE 100 nudged fresh four and a-half year peaks,
also boosted by signs of progress on the US budget talks.
Exporters drew some strength from weakness in the pound,
which dropped to 10-month lows against the euro and nine-week
lows against the US dollar. That could make Britain's exports
more attractive and increase the value in pounds of
companies' profits earned abroad.
Mr Timms said markets were seeing more positive news from
China and the US.
''It's also the middle of the reporting season and we are
seeing some big numbers coming out of the US.''
Companies like Google, Yahoo! and IBM were due to report
today or tomorrow. They all dealt internationally, rather
than being focused just on their home markets. It was the
same for some of the larger European companies. While
business was tough in some parts of Europe, those companies
which had looked outward were doing well, he said.
''People are more confident in taking a longer-term view and
looking at longer-term assets. Companies like Vodafone and
Diageo are listed in Europe but are not European-focused. It
is the same as we saw in the US last year - multinationals
did well because their earnings were not focused there,'' Mr