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Paddy Power Betfair drags Iseq into the black

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Weak financial stocks weighed on European shares on Monday after a strong run of weekly gains, while dealmaking livened up trading.

UK shares fell slightly following a strong run, while a potential bidding war for IWG triggered a surge in the serviced office provider’s stock, the latest deal in a flurry of mergers and acquisitions.

US stocks pared gains in thin trading, while the 10-year US Treasury yield stalled just below 3 per cent as investors assess the outlook for trade relations and tensions in the Middle East. Crude oil rose.

Dublin
The Iseq rose 0.7 per cent, boosted by a sparkling run from heavyweight stock, Paddy Power Betfair. It finished the session up almost 12 per cent to €90 after a US supreme court ruling paved the way for states to legalise sports betting.

Bank of Ireland dropped almost 0.7 per cent to €7.45, as European banks generally spent Monday in the doldrums. AIB bucked the trend, up 0.8 per cent to €5.05.

Ferries operator Irish Continental Group fell more than 2 per cent to €5.55, ahead of the announcement of its final dividend later this week. It was in the black at lunchtime, but dropped when a seller entered the market in the afternoon.

London
The FTSE 100 index of leading stocks fell 0.2 per cent, weighed down by financials and by a rising pound, which typically weighs on dollar-earning companies, while the broader FTSE 250, which includes IWG, added 0.1 per cent.

Shares in IWG shot up 22.8 per cent to the top of the STOXX after the workspace provider said it had been approached for a takeover by three rival suitors.

Bookmakers William Hill and GVC rose between 7 and 11 per cent as investors bought into the sector after the US Supreme Court ruling.

British Gas owner Centrica which reaffirmed its 2018 targets, citing higher energy demand from colder-than-usual weather, was up 1.4 per cent.

TalkTalk Telecom Group added 0.4 per cent after a report that said it was working with Virgin Media on a deal to share the cost of new ultrafast broadband networks and dial up pressure on BT. The latter was down 2.4 per cent.

Europe
EDP shares climbed 9.3 per cent after China’s state-owned utility China Three Gorges offered $10.8 billion to take control of the Portuguese power firm. It ended above the bid price, which offered a premium of just under 5 per cent to its closing price on Friday.

In results-driven moves, Dutch bank ABN Amro fell 6 per cent, dragging the financials sector down. It reported a drop in first-quarter net profit due to ongoing problems in the oil sector, leading to impairments on loans to shipping and offshore services clients.

Healthcare stocks were the best-performing, following a rally in US pharma on Friday after investors found US president Donald Trump’s speech on drug prices less harmful than expected for pharma companies’ business models. The healthcare sector index climbed 1 per cent.

Easing US-China trade tensions failed to boost European markets, and Trump’s U-turn on Chinese phone equipment vendor ZTE, sent Nokia shares down 1 per cent, while Ericsson fell 1.1 per cent.

New York
Heading into the afternoon, shares of some of the biggest suppliers to ZTE, including Acacia Communications, Oclaro and Lumentum Holdings, had risen between 10.6 per cent and 3.1 per cent.

Chip stocks got a boost from news that China had resumed its review of chipmaker Qualcomm’s proposed $44 billion takeover of NXP Semiconductors. NXP surged 14.2 per cent and Qualcomm 3 per cent. The Philadelphia semiconductor index was up 1.6 per cent.

The defensive utilities, telecoms and real estate were the only three losers among the major S&P sectors, while technology and healthcare indexes were the biggest boosts.

Energy stocks were the biggest percentage gainers, rising 0.8 per cent as oil rose after OPEC reported that the global oil glut has been virtually eliminated.

– (Additional reporting: Reuters/Bloomberg)

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