European shares edged up on Thursday as financial and tech stocks recovered, while troubled furniture retailer Steinhoff sank further, stung by an accounting scandal. Investors recovered their risk appetite, pushing euro zone stocks up 0.2 per cent, with financials the strongest sector, helping the bank-heavy Italian and Spanish markets outperform strongly with gains of 0.6 to 0.7 per cent. Euro zone stocks once again performed better than the broader pan-European STOXX 600 index as UK stocks slipped.
Dublin’s Iseq rose 40 points to 6,994 in line with other bourses in Europe. Swiss-Irish food company Aryzta consolidated the gains of recent days, rising 0.7 per cent to €30.64 even after 46 per cent of shareholders opposed the group’s executive pay deal at its annual general meeting in Dublin on Thursday.
Shares in media group Independent News & Media fell 4 per cent to 10 cent after increasing in the previous session, with €460,000 worth of shares traded.
Paddy Power Betfair rose marginally to €96.55 on foot of news that rival bookmaker GVC Holdings had offered to buy Ladbrokes Coral for up to £3.9 billion in the latest consolidation of the gambling market.
Ryanair was marginally down at €17.13, which was roughly in line with rivals, while Bank of Ireland continued its good run, rising 1.1 per cent to €6.73.
UK stocks fell to a 10-week low on Thursday, weighed down by energy stocks and consumer staples as sterling edged higher on a glimmer of hope in Brexit talks. The blue-chip FTSE 100 ended the session down 0.4 per cent, with oil majors BP and Royal Dutch Shell taking the most points off as oil prices hovered near three-week lows.
BP closed down 1.2 per cent and Shell down 1 per cent. Sterling rebounded slightly but remained near an eight-day low as many doubted whether British officials would be able to break through a deadlock before a crucial EU summit next week.
Aside from Babcock International, which went ex-dividend, consumer staples were among the largest decliners, with Associated British Foods down 2.3 per cent and British America Tobacco down 1.4 per cent.
Pearson was the top blue-chip gainer, up 2.2 per cent after JP Morgan raised its target price for the company in its 2018 European media outlook.
Ladbrokes Coral jumped 29 per cent as bookmaker GVC Holdings offered to buy it for up to £3.9 billion to create an online and high-street betting giant in the latest consolidation of the gambling market.
Euro zone banks jumped 1.1 per cent, recovering after a risk-off mood dented financials in the previous session. Banks ING, Santander, Unicredit and Intesa Sanpaolo drove gains, up 0.7 to 1.4 per cent as confidence in the sector, and particularly peripheral European lenders, returned. “In the world, the sector with the biggest potential to grow from here in earnings is probably continental European banks,” said Kevin Gardiner, global investment strategist at Rothschild Wealth.
The tech sector edged up 0.2 per cent, recovering slightly from several sessions of losses as investors grew more wary of highly valued parts of the market. Sylvain Goyon, an equity strategist at France’s Natixis, said the recent sell-off in technology shares was not driven by a change in the fundamentals of the sector and was not likely to last long.
Shares in Frankfurt-listed Steinhoff plunged 45 per cent, extending the previous session’s dramatic fall after the South African retailer revealed accounting irregularities and its chief executive quit. The stock was down 80 per cent over the two sessions, knocking $12 billion off its market value.
Carrefour, meanwhile, lost 2.9 percent, bottom of Paris’s CAC 40 after a downgrade by Bernstein analysts, who argued that recent share price gains were based on “wishful thinking” that a potential deal with Amazon was made more likely by the recent Casino-Ocado tie-up.
The three major US indexes rose in late morning trading on Thursday, with stocks of technology companies leading the pack, followed by industrials. Gains in Apple and Alphabet lifted tech stocks and were among the biggest boosts to the S&P and the Nasdaq. Chipmaker Broadcom’s upbeat profit and dividend raise received investor support, with shares rising. General Electric rose 1.6 per cent after the industrial conglomerate said it was cutting 12,000 jobs at its global power business.
Lululemon Athletica gained 8 per cent after the Canadian yoga and leisure apparel maker reported a higher-than-expected profit and gave an upbeat holiday season forecast.
The Consumer Staples index’s 0.55 per cent fall led the decliners. Procter & Gamble and Coca-Cola fell about 1 per cent, dragging the sector down. Data showed the number of Americans filing for unemployment benefits unexpectedly fell last week, with claims for state unemployment benefits slipping 2,000 to 236,000 for the week ended December 2nd.
– Additional reporting by ReutersTags: Alphabet, Amazon, Associated British Foods, Babcock, Bank of Ireland, BP, Broadcom, Business, Carrefour Group, Coca Cola, Dublin(IE), Eoin Burke Kennedy European, Eu, Europe, France, Frankfurt Listed Steinhoff, General Electric, Gvc, Independent News, Intesa, Kevin Gardiner, Ladbrokes, London(GB), Markets, Natixis, New York City, Paddy Power, Paris(FR), Pearson, Procter and Gamble, Rothschild, Royal Dutch Shell, Ryanair, Santander, Shell, Steinhoff, Sterling(US.VA), Swiss Irish, Sylvain Goyon, UniCredit, United States