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European stocks lifted by deals but Iseq drops

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European shares edged higher on Friday, capping off their longest weekly winning streak for more than three years as investors mulled a slew of mergers and acquisitions (M&A) activity.

The pan-European STOXX 600 index ending up 0.1 per cent, scoring its seventh straight week of gains and the longest winning streak since March 2015.

Dublin
However, the Iseq index stood out as a weak spot, falling 0.4 per cent to 6,961.59, as a number of heavyweight stocks out of sorts.

Ryanair lost 1.1 per cent to €15.36 as Spanish pilots’ union SELPA broke off discusions with the airline over a union recognition agreement and said it plans to file a lawsuit against the airline over contacts in Spain.

CRH declined by 0.7 per cent to €30.71, as sector followers switched into French peer Saint Gobain, which struck a deal to buy a stake in Swiss chemicals company Sika.

Elsewhere, C&C dropped 2.2 per cent to €3.05 and Bank of Ireland dipped 0.5 per cent to €7.50.

Bucking the trend, Independent News & Media gained 2.2 per cent to 9.2c, as it recovered some of the ground lost recently. Dalata added 0.6 per cent to €2.71 as it announced it has reached agreement to provide its digital commerce platform to Multiplus, the leading loyalty network company in Brazil.

London
The FTSE 100 index closed up 0.3 per cent to 7,724.55, delivering a seventh successive week of gains and coming a day after the Bank of England opted to keep interest rates on hold, despite having signalled a hike was on the cards only weeks ago.

ITV jumped 7.3 per cent, building on gains on Thursday, when it reported a 5 per cent rise in total external first-quarter revenue. .

ZPG, the owner of property websites Zoopla and PrimeLocation, surged 30.6 per cent to a record high, top of the mid-cap index, after US private equity firm Silver Lake Management offered £2.2 billion (€2.5 billion) for the company.

John Wood Group rose 10.4 per cent after the oil services group confirmed its outlook for 2018.

Utilities stocks fell to the bottom of the FTSE after Bernstein cut Severn Trent to “underperform” and reduced its target price on United Utilities.

Europe
Sika soared 8.3 per cent after the Swiss chemicals company reached an agreement with French building materials firm Saint-Gobain to end a long-standing legal dispute.

Saint-Gobain, whose shares rose 2.7 per cent, is to take a large stake in Sika, but not majority control.

“We see this as positive for (Saint-Gobain), which we believe has been negatively impacted, with some investors preferring to remain on the side lines because of the uncertainties linked to the Sika operation,” Raymond James analysts said in a note.

While the first quarter earnings season was winding down in Europe, basic resources was the best-performing sector after shares in ArcelorMittal rose 2.3 per cent. The world’s biggest steelmaker beat earnings forecasts and gave an upbeat outlook for 2018.

Earnings updates also boosted shares in Italian banks. A return to profit for troubled Italian bank Monte dei Paschi di Siena send its shares up 17.7 per cent and added impetus to signs of a tentative recovery among the country’s battered lenders on Friday.

New York
US stocks edged higher in early afternoon trade, with the Dow Jones Industrial Average up 0.3 per cent, at 24,821.74, while the S&P 500 gained 0.2 per cent, and the Nasdaq Composite edged 0.02 per cent higher.

Verizon rose after JPMorgan upgraded the wireless carrier to “overweight”, saying 5G opportunity will start to crystallize in next few months.

The tech sector came under pressure from a set of disappointing results. Nvidia, the best performing chip stock this year, fell after revenue from its closely watched data center business disappointed investors.

Symantec slumped 35 per cent after the Norton Antivirus maker said its annual report may be delayed as it investigated an unspecified claim made by a former employee.

– Additional reporting, Reuters

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