Banks lead European stocks to 10-week high

US tax plan fuels investors’ hopes of ‘Trumpflation’ trading

Traders on the floor of the New York Stock Exchange. Losses in consumer stocks cut gains for Wall Street’s main indices. Photograph: Reuters

Traders on the floor of the New York Stock Exchange. Losses in consumer stocks cut gains for Wall Street’s main indices. Photograph: Reuters

 

US president Donald Trump’s tax plans boosted stocks on Wednesday, while strong showings from several index heavyweights helped the Irish market outperform others in Europe.

DUBLIN

Kingspan was one of the star performers on a day when a number of leading stocks gained significant ground. The insulation specialist closed 3.43 per cent ahead at €38.855 after announcing that it had bought 51 per cent of Brazilian manufacturer Isoeste Construtivos Isotérmicos for €134 million. Kingspan hit a 52-week high of €34.945 at one point on Wednesday.

Ryanair shares climbed 2.47 per cent to €16.83 despite announcing another round of flight cancellations to follow those revealed almost two weeks ago. The airline will fly 25 fewer aircraft between November and March, leading to more cancelled flights through this period.

It now expects to carry 129 million in its current financial year, rather than the projected 131 million. Ryanair is also dropping its bid for troubled Italian carrier Alitalia.

Building materials giant CRH gained 2.12 per cent to €31.10 as its sector proved popular with investors across Europe. Packager Smurfit Kappa gained 1.27 per cent €26.76.

LONDON

Troubled infrastructure giant Carillion saw its shares jump on speculation a Middle East investor is planning to bid for the group. Its stock was up more than 20 per cent, or 9.8 pence, to 56.3p.

However, PZ Cussons saw its stock value tumble after it became the latest firm to warn over a tough consumer market in the UK as Brexit-fuelled inflation puts households under pressure. Shares fell more than 1 per cent or 5.9p to 323.5p, as the firm said it was seeing tough trading conditions in many of its global markets, “which have been evident in the first quarter and which are expected to continue for the full year”.

The biggest risers on the FTSE 100 index were Pearson up 22.5p to 606p, Royal Bank of Scotland up 9p to 270.8p, Lloyds Banking Group up 2.2p to 67.2p, Prudential up 47p to 1,763.5p.

The biggest fallers were Randgold Resources down 175p to 7,300p, National Grid down 17.9p to 925.3p, Fresnillo down 23p to 1,399p, United Utilities down 13.5p to 840.5p.

EUROPE

Banks led European stocks to a 10-week high as a tax overhaul plan backed by President Trump fuelled hope in a revival of the “Trumpflation” trade.

Banks touched a six-week high, up 2 per cent, as the prospect of fiscal stimulus in the US resurfaced.

Spain’s Banco Sabadell, which had suffered in the wake of tensions over the Catalan referendum, posted the best performance of the STOXX 600 with a 6.9 per cent jump after the central government said police would take control of voting booths in Catalonia to thwart it.

Madrid’s IBEX was by far the best performer among major European bourses with a 1.8 per cent rise.

Mergers and acquisitions also drove the market with Alstom shares hitting their highest level in more than six years after the French industrial group struck a deal to merge rail operations with Germany’s Siemens.

Alstom rose 4.6 per cent while Siemens gained 1.2 percent. Analysts combed through the fine print of the deal, saying it made strategic sense in a consolidating rail industry globally with competition heating up, but pointing to potential problems in cost-cutting plans.

Swedish retailer ICA sank 4.6 per cent after SEB cut it to “sell”, and Electrolux fell 4 per cent after Goldman Sachs cut it from its pan-European “buy” list.

US

Losses in consumer stocks cut gains for Wall Street’s main indices after a burst of optimism fuelled by hints Trump may deliver promised tax cuts.

Nike slipped 3.4 per cent after the company posted its slowest quarterly sales growth in nearly seven years, and said it expected a further drop in revenue from North America.

A rise in the return on savings helped financial stocks. Bank of America rose 2.4 per cent, lifting the S&P, while Goldman Sachs’ 1.5 per cent rise helped the Dow. – Additional reporting: Reuters