Markets rise as geopolitical tensions ease

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European shares rose on Tuesday to their highest since the end of February as sentiment on tensions between the US and Russia eased and attention shifted to deal-making and the first-quarter earnings season.

Britain’s FTSE 100 advanced as sterling retreated from its highest level since the Brexit vote.

US stocks rallied for a second day amid better-than-expected earnings from several industry heavyweights, adding to evidence that the strengthening US economy is lifting corporate profits.

The Iseq remained flat on solid trading volumes. Falcon Oil and Gas soared more than 28 per cent to close at 29.3 cent after news emerged that the Northern Territory government in Australia has lifted a moratorium on hydraulic fracking, which will benefit Falcon and its assets in the region.

Tullow Oil remained flat on the Dublin exchange at €2.50, after announcing that Aidan Heavey is to be replaced as chairman. It fell 1.2 per cent in London, its main listing.

Bank of Ireland rose 0.7 per cent ahead of a trading update this week.

Ryanair fell by more than 2 per cent to €15.90 after a hearing of a row involving airlines taking legal action against the State over travel tax.

Sterling’s recent strength has made some investors cautious around the FTSE’s large dollar-earning constituents. On the day shares in big consumer firms such as British American Tobacco, Reckitt Benckiser and Diageo all fell between 0.5 per cent and 3.2 per cent.

Associated British Foods shares rose more than 4 per cent despite profit falling slightly as traders focused on a resilient performance from its fashion business Primark, known as Penneys in Ireland.

Reckitt Benckiser shares fell 3.2 per cent after Credit Suisse downgraded the stock to underperform.

Mid-cap stocks saw strong gains after results. Emerging markets asset manager Ashmore rose 3.8 per cent after reporting the strongest net inflows since June 2013, boosting its assets by 10 per cent in its third quarter.

Strong demand for trainers and track pants boosted JD Sports’ profits, sending its shares up 5.2 per cent. Shares in roadside assistance firm AA soared 17.4 per cent to the top of the small-cap index after reporting results.

Italian banks rallied up 1.7 per cent after the country’s biggest lender Intesa Sanpaolo agreed a sale of bad loans that investors said could help other banks to achieve better terms and boost lending. Shares in Sweden’s Intrum Justitia, which bought Intesa’s loans, rose 8 per cent.

Elsewhere, AB Foods advanced 4.1 per cent after meeting results expectations with a resilient performance at its Primark fashion business and a previously flagged reduction in sugar revenues.

Casino rose 1.3 per cent after the French supermarket chain reported a 3.1 per cent rise in first-quarter sales that reflected stronger performance in its Geant Casino hypermarkets and in Brazil despite food inflation.

Sanofi firmed by 0.6 per cent after the French healthcare group announced exclusive talks to sell its Zentiva European generics drugs.

US stocks rose more than 1 per cent on Tuesday, helped by gains in technology companies and as strong earnings from Netflix and United Health boosted optimism over what is expected to be the strongest earnings season in seven years.

Netflix shares rose as much as 9.3 per cent to $336.25, hitting an all-time high, after the video-streaming pioneer smashed analysts’ quarterly subscriber estimates, helped by a blitz of original content.

United Health jumped 3.4 per cent after the largest US health insurer raised its earnings forecast and posted results that beat Wall Street estimates.

All the 11 major S&P sectors were higher, led by the technology index’s 1.91 per cent gain. The consumer discretionary index rose 1.7 per cent, boosted by Netflix and Amazon, which gained 2.7 per cent. is in talks with Brazilian airline Azul on shipping goods in the country, Latin America’s largest economy. – Additional reporting: Bloomberg/Reuters

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