Major world stock markets rose and government bond yields fell on Tuesday as a combination of strong corporate profits, steady global growth and low inflation provided scant alternatives for investors other than equities.
Stocks markets from Asia to Europe to the Americas rose, with technology stocks boosting the Nasdaq Composite index to a record intra-day high.
The Iseq ended the day lower, slipping into negative territory to close down 18.87 points lower at 6.922.38.
Heavyweight CRH was one of the biggest fallers, down 2.7 per cent to €30.08 after the building material group forecast full-year earnings of €3.2 billion, slightly below market expectations.
Airlines were up generally across Europe on the back of positive results from Easyjet. Ryanair gained from this, at one point passing the all-important €18 mark and ending the day slightly below that at €17.97, up 1.7 per cent compared to the previous day.
Other movers on the Dublin market included Total Produce, up 1.6 per cent and Kerry, up 1.2 per cent. Bank of Ireland was down just over 1 per cent to €6.28 with many investors waiting to see how the tracker mortgage scandal plays out and to see what changes new chief executive Francesca McDonagh might introduce.
A flurry of company updates and strong consumer stocks helped Britain’s FTSE 100 climb on Tuesday, with Easyjet rising. But defence and engineering contractor Babcock fell sharply after its results.
The FTSE rose 0.3 per cent, its best daily gains in three weeks, ending the day at 7,411.34 points following a weak start, while mid caps gained 0.4 per cent.
Easyjet’s full-year earnings were well-received, sending its shares soaring more than 5 per cent to the top of the FTSE. The airline said it was benefiting from the collapse of rivals and problems at peer Ryanair, which have helped its pricing trends.
Consumer staples drove the strongest gains, with tobacco company Imperial Brands up 3.5 per cent as investors bet on a potential bid from Japan Tobacco.
There were some eye-catching falls after results, however. Babcock dropped 6.8 per cent as concerns over UK defence spending overshadowed first-half earnings in line with expectations. Compass fell 3.3 per cent, touching its lowest level in eight months after releasing its full year earnings, while Intertek was 3.4 per cent lower after issuing a trading statement.
European shares quickly recovered from a weaker open on Tuesday as continued faith in the underlying strength of the European economy and a synchronised global expansion overcame negative trading updates, notably in Britain.
The STOXX 600 benchmark ended up 0.4 per cent with most European bourses and sectors in positive territory. Germany’s DAX rose 0.8 per cent after chancellor Angela Merkel said she would prefer a new election to minority rule after the failure of talks to form a three-way coalition.
Volkswagen was among Germany’s top gainers for a second day. The carmaker extended gains made after raising its mid-term outlook on Monday, rising 3 per cent.
ProSiebenSat.1 rose 1.5 per cent after JP Morgan lifted its target price to €45 amid continuing speculation that the German broadcaster could become an acquisition target.
Energy group Uniper, meanwhile, ended flat after saying it rejected an €8.05 billion bid from Finland’s Fortum.
Wall Street indices hit record levels in early trading on Tuesday, with technology stocks rising for a second straight day and healthcare shares getting a boost from Medtronic’s results.
Apple’s shares were up nearly 2 per cent, boosting all three major indexes. Medtronic rose 5.3 per cent, making it the top gainer on the S&P 500, after the medical device maker reported better-than-expected results and backed its forecast.
Hormel Foods rose 5.5 per cent, while Urban Outfitters gained 4.7 per cent after reporting quarterly results.
– additional reporting ReutersTags: Angela Merkel, apple, Bank of Ireland, Business, COMPASS, CRH, EasyJet, Fortum, Francesca Mcdonagh, Hormel, Imperial, Japan Tobacco, Markets, Medtronic, Ryanair, Total Produce, Uniper, Volkswagen AG