Local equities showed character during yesterday's trading session at the Malta Stock Exchange as investors reversed initial weakness into pockets of strength among the larger capitalised companies. As a result the MSE index gained 0.46 per cent to close at 5,091.512 points.

HSBC Bank Malta was the day's most liquid and actively traded equity as well as the session's top gainer as 28,925 shares were swapped across 24 transactions. Constant buying activity cleared all supply up to the Lm2.10 level, thereby seeing the equity close 2c1 or 1.0 per cent better.

Bank of Valletta gained 2c or 0.5 per cent as Lm75,088 worth of shares were transacted across 14 trades. The equity reclaimed the Lm3.70 level, for the first time in three weeks, towards the end of the session.

On the contrary Lombard Bank Malta shed Lm0.052 or 0.9 per cent as 2,956 shares were struck across four deals.

Two investors swapped 2,900 shares of Medserv at the Lm1.41 level, which represents a 1c or 0.7 per cent premium to its previous closing level as well as a new record high.

Middlesea Insurance succumbed to the Lm2 level as a single sale of 14,490 shares was executed in rapid succession across five deals, while Malta International Airport dropped 0c5 to close at Lm1.375 on two trades for a total of 1,000 shares.

Elsewhere in the market, Maltacom dropped to their lowest level this year at Lm1.43. However, this price proved too tempting and investors purchased shares, thereby helping the equity close unchanged on the day at Lm1.48.

European markets hit six-year highs

European equity markets rose to fresh six-year highs yesterday, with Italy's Capitalia leading banks higher after Spain's Santander was reported to be poised to raise its stake to around five per cent. By midday, the FTSE Eurofirst 300 was up 0.5 per cent, Frankfurt's Xetra Dax added 0.3 per cent and the CAC 40 in Paris edged 0.2 per cent higher.

The FTSE reached a fresh six-year high amid continued strength in the retail sector. The blue-chip index peaked at 6,349.5 in morning trade, its highest level since early 2001, with Wm Morrison and Tesco among the leading gainers.

Monday's heavy sell-off of Japanese stocks prompted a flurry of "buy" orders yesterday as dealing rooms judged that the previous day's trading had been too downbeat. The tech-weighted Nikkei 225 Average climbed 0.4 per cent to close at 17,406.86. Reflecting strong gains for utility and marine transport issues, the broader Topix Index rose 0.9 per cent to 1,732.42.

Overnight Wall Street was in a cautious mood amid a flurry of merger and acquisition activity and earnings reports. Stocks ended the day little changed against a backdrop of higher oil prices. The S&P 500 was 0.1 per cent lower at 1,446.98. After solid gains last week, analysts debated whether the bull run could continue.

BOV and VFM are licensed by the MFSA to conduct investment services business.

Valletta Fund Management (Tel. 8007 2344) and Bank of Valletta plc (Tel. 2131 2020).

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