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Wall Street recovery spreads to European markets

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Recovery on Wall Street spread to European markets including Dublin, where a number of heavyweights performed well.

DUBLIN
Traders in Dublin declared that it was “up, up, up” on Wednesday. They said investors’ belief that the previous days’ selling was overdone drove the near universal rise in stocks. “People look for a buying opportunity and they are seeing this as a buying opportunity,” said one.

Smurfit Kappa fell 1.29 per cent to €27.64 after reporting a 12 per cent drop in 2017 profits to €576 million on the back of once-off increases in finance costs and restructuring.

Dealers noted that company plans to focus €1.6 billion capital spending plans “internally” rather than on acquisitions put investors off.

Insulation and building materials manufacturer Kingspan was one of the star performers of both the Dublin market and its industry generally. Shares in the Cavan-based group surged 3.5 per cent to €36.64.

In a related sector, index heavyweight, building materials multinational CRH, gained 1.81 per cent to €28.10.

Housebuilder Glenveagh added 2.39 per cent to €1.20. Rival Cairn Homes added 1.08 per cent to €1.87.

Real-estate investor Green Reit rose 1.97 per cent to €1.55 while landlord Ires Reit gained 1.14 per cent to €1.426.

LONDON
Irish explorer Tullow Oil climbed 1.36 per cent to 186p after reporting an €18 million operating profit, beating analysts’ forecasts of a near €100 million loss.

Grafton, the Irish-headquartered builders’ merchant and DIY specialist, advanced 2.21 per cent to 762p as the construction sector generally performed well in London.

The benchmark FTSE 100 was up 1.9 per cent at 7,279.42 points at its close, in line with a bounce across other European bourses. However, investors were still cautious given that the FTSE dropped 2.6 per cent on Tuesday, its sixth straight session of declines.

Old Mutual, HSBC, Barclays, Prudential and Lloyds rose between 1.7 per cent to as much as 5.4 per cent.

Investment trust Scottish Mortgage was the top riser, up 6.7 per cent and recovering all of the previous session’s losses after the sell-off in US tech stocks took its toll on the fund, whose top holdings include Amazon and Tesla.

Oil majors BP and Royal Dutch Shell also contributed to lifting the index, both rising around 2 per cent.

EUROPE
Company results helped bolster European indices. Hexagon soared 10.8 per cent to lead gainers on the STOXX after the Swedish industrial technology company reported fourth-quarter core earnings ahead of analyst forecasts.

Statoil gained 4.6 per cent. The Norwegian oil producer said it would raise its dividend after beating fourth-quarter earnings forecasts, helped by higher oil prices.

Air France KLM fell 1.32 per cent to €11.55 after a mixed day for airlines. Others also disappointed. ABN Amro fell 3.4 per cent. The Dutch bank beat analyst expectations with a 63 per cent jump in fourth-quarter net profit, but some traders voiced concerns about cash returns, saying it was light on capital.

Enzyme-maker Novozymes and brewer Carlsberg also fell sharply, down 4.6 per cent and 3.6 per cent respectively, following their updates.

Orion shares sank 10.5 per cent, the worst-performing on the STOXX, after the Finnish pharma company gave a disappointing revenue guidance.

US
US stocks crept higher on Wednesday as volatility eased and buyers returned to a market that is recovering from a record fall for the Dow Jones Industrial Average earlier this week.

Gains were broad based, with 10 of the 11 major S&P sectors higher.

The industrial, financial and consumer discretionary stocks led advances on the S&P and the Dow. Boeing rose 2.7 per cent, providing the biggest boost.

Wynn Resorts climbed 8.1 per cent after casino mogul Steve Wynn resigned as chief executive following sexual misconduct allegations. Snapchat owner Snap soared 37.8 per cent after it reported surging growth in users and revenue in its latest quarter. – Additional reporting: Reuters

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