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World stocks rebound but volatility stays elevated

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Ireland’s Iseq overall index reversed some losses after a tough week last week and closed up 1.31 per cent with strong performances from Bank of Ireland and Total Produce.

British shares, too, rebounded thanks to a relief rally in commodities stocks. But with market volatility tipped to stay elevated, investors were divided over whether to buy the dip.

Wall Street’s main indexes rose for a second straight session on Monday, led by gains in technology and financial stocks, after its worst week in two years as the spectre of rising inflation led to fears of accelerated interest rate hikes.

Dublin
Bank of Ireland was the star performer on Dublin’s Iseq 20 index on the first day of the trading week up 4.66 per cent at €7.965. While there was no sector specific news on Monday, its peers, AIB and Permanent TSB, were both up 1.01 per cent and 0.23 per cent respectively.

Following its deal at the start of this month to take a 45 per cent stake in US-based Dole Food Company, Total Produce traded well at the beginning of the week and, with strong volume, ended up 3 per cent at €2.40. The Dublin-based fresh produce company said it was a significant step in its history, bringing together two global brands and creating the world’s leading fruit and vegetable group.

Building materials group CRH also had a strong day and closed up 0.46 per cent at €27.22, also with good volume. The company’s European peers, Buzzi, in Italy, and Heidelberg Cement, in Germany, also ended in the green.

Only six stocks ended the day lower on the Iseq overall index but none had particularly significant volume.

London
The FTSE 100 was up 1.2 per cent at its close, regaining some of last week’s losses but still near a 13-month low.

Energy, materials and financials gave the index its biggest boost as the cyclical stocks that had suffered the worst losses last week led the gains.

Oil majors Royal Dutch Shell and BP both rose around 2 per cent, as crude prices also recovered from last week’s declines.

Miners Anglo American, Glencore, BHP Billiton and Rio Tinto were among the biggest gainers, with steel producer Evraz top of the FTSE, up 5.8 per cent, as metals prices rose.

Bucking the trend in the mining sector was Acacia Mining , down nearly 4 per cent after scrapping its 2017 dividend.

Small-cap UP Global Sourcing sank 47.5 per cent after a trading update which Shore Capital analyst Darren Shirley called ‘disappointing”.

Europe
The pan-European Stoxx 600 index ended in positive territory, thanks to a bounceback in cyclical stocks, but the general mood has been one of caution as investors wait to see if there will be more volatility to come.

Danish telecoms company TDC saw shares end up 13.39 per cent after the group urged investors to back a $6.7 billion (€5.46 billion) cash offer from Australia’s Macquarie and three pension funds.

Heineken warned profitability in 2018 would improve by less than expected and shares in the Dutch brewer fell 2.03 per cent.

New York
Nine of the 11 major S&P sectors were higher in early US trading, with only the interest-rate sensitive utilities and real estate indexes in the red.

Despite gains of about 1.5 per cent on Friday, the three indexes are still 6 per cent to 6.5 per cent lower since February 2nd, when strong US jobs and wages growth data sparked inflation fears, igniting a rally in bond yields and a sell-off in stocks.

US 10-year Treasury yields hit a new four-year high of 2.902 earlier Monday, but then dipped near their session-lows.

Among stocks, General Dynamics fell after the US defence contractor said it would buy smaller rival CSRA for about $6.8 billion.

American Express gained after Instinet upgraded it to a “buy” rating.

– Additional reporting, Reuters

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