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European shares build on post-selloff recovery

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European shares gained further ground after the carnage of last week, with the pan-European Stoxx 600 ending up 0.5 per cent at its highest level in a week. The main European stock index is still 6.7 per cent lower than the two-and-a-half year high hit on January 23rd.

Although US inflation came in higher than expected on Wednesday, the data did not trigger a fresh selloff as had been feared. Wall Street stocks opened higher and were on track to rise for the fifth straight day on Thursday.

Dublin
The Iseq index rose 0.8 per cent as its biggest shares recovered ground on a day dealers described as “reasonably positive as a whole”. CRH, which had fallen on Wednesday, closed up 2.3 per cent at €28.05, lifting the Dublin market.

Ryanair added 0.8 per cent to €16.29 on a below-average trading volume for the stock, while Bank of Ireland was 1 per cent higher at €7.73. A high volume of shares traded in housebuilder Glenveagh Properties, which was up about 0.2 per cent at €1.17.

Paper and packaging group Smurfit Kappa gained 1 per cent to €28.66, while food groups Kerry and Glanbia both edged up despite food sector concerns earlier in the day on foot of weak results from Nestle. Kerry added 0.5 per cent to €85.25, while Glanbia finished 0.4 per cent higher at €14.61.

Cairn Homes was among the fallers, dropping 3.4 per cent to €1.84, while insurer FBD Holdings also finished in the red, down 2.3 per cent at €10.75.

London
The FTSE 100 rose 0.3 per cent, after a rally in mining stocks and gains for companies exposed to South Africa. Mining stock Fresnillo and Johnson Matthey, a leader in catalysts for car emission control devices, led the market, gaining 4.6 per cent and 3.2 per cent respectively.

As the rand held near a three-year high after president Jacob Zuma resigned, shares in South Africa-exposed financial services group Old Mutual and miner Anglo American rose 3 per cent and 1.9 per cent respectively, while paper and packaging company Mondi advanced 2.7 per cent.

Standard Life Aberdeen was closed down 7.5 per cent after Lloyds and Scottish Widows pulled the plug on an asset management deal. Falling oil prices hit oil majors BP and Royal Dutch Shell which lost 0.9 per cent and 1.6 per cent respectively.

Europe
In Germany, the Dax nudged up less than 0.1 per cent, while the French Cac 40 added 1.1 per cent, buoyed by gains for Paris-listed Airbus.

Airbus closed up more than 10 per cent after it announced it was taking a €1.3 billion charge on its military plane, clouding its better-than-expected profits, however the aircraft manufacturer’s signal that it would secure 20 per cent earnings growth this year sent the stock soaring.

Nestle’s shares were down as much as 2.8 per cent, a 10-month low, and closed 2.1 per cent lower at €75.70, after a trading update from the Swiss food giant disappointed investors.

Shares in Aegon gained 2 per cent after the Dutch insurer reported a doubling of quarterly net income and raised estimates for future earnings, thanks to a tax cut in the US.

Expansion costs weighed on budget airline Norwegian Air, which reported a bigger-than-expected fourth-quarter loss and closed down almost 5 per cent at €184.00.

New York
Wall Street’s main indexes were trading higher with gains in technology and industrial stocks more than offsetting losses in energy stocks, as oil prices fell more than 1 per cent.

Blue-chips Apple and Cisco led the market upwards as investors hunted for bargains. Cisco shares were 3.3 per cent higher after the network gear maker posted upbeat results and forecast, while Apple rose 1.6 per cent after Warren Buffett’s Berkshire Hathaway made the iPhone maker its top investment.

– Reuters

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