European shares hit multi-year highs amid better than expected earnings
Resignation of Paddy Power CEO drags down Irish market
Patrick Kennedy, chief executive at Paddy Power, announces his retirement. Photograph: Dara Mac Dónaill
European shares closed at a six-year high on solid corporate earnings and the chance of more European Central Bank stimulus. The euro fell to a five-week low versus the dollar after a gauge of German investor confidence declined for a fifth month, fuelling speculation the European Central Bank will take measures to boost the region’s economy.
The Iseq index shed 33 points (0.7 per cent) to end the day on 4,863, dragged down by Paddy Power. As a result, the Dublin market closed behind its European peers. Paddy Power fell 4.2 per cent to €56.67 after chief executive Patrick Kennedy said he will step down next year. “The CEO resignation was unexpected. He was a key driver of growth in the business. [The resignation] was a shock to the market.”
Paddy Power’s shares have more than quadrupled since he became CEO in January 2006.
Glanbia’s stock climbed 3.9 per cent to €10.96 on the back of a strong trading statement which showed a 17 per cent rise in first-quarter revenues compared to the same period last year. Shares in Donegal Investments meanwhile closed down 5.6 per cent at €5.90.
Britain’s top share index hit its highest closing level since December 1999 on Tuesday, led by house-building stocks, with technical analysts betting the broader market could push on further still. The FTSE 100 ended up 21.33 points, or 0.3 percent, at 6,873.08 points.
Persimmon and Barratt Developments both rose 3.2 per cent, the top FTSE 100 risers, after smaller rival Taylor Wimpey said sales rates were at the upper end of its expectations, sending its shares up 7.6 per cent.
EasyJet dropped 4.2 per cent after saying second-half per seat revenue will grow in low single-digit percentage. Europe’s second-biggest budget airline reported a pre-tax loss of £53 million (€65 million) in the six months to March 31st.
AstraZeneca, which has surged more than 20 per cent since Pfizer indicated in April it wanted to buy the firm, rose 0.7 per cent.
European equities ended higher yesterday, with some benchmarks hitting multi-year highs following upbeat company results from major companies such as aerospace giant Airbus and steelmaker ThyssenKrupp.
Airbus, the world’s second-largest aerospace group, surged 6.2 per cent after reporting better-than-expected profits and saying its new A350 jet was “progressing towards certification” in time for first delivery by the end of the year.
ThyssenKrupp, Germany’s biggest steelmaker, rose 4.1 per cent after posting its first quarterly net profit in two years – beating analyst estimates – and raising its forecast for full-year operating profit.
Telecom Italia declined 5.2 per cent as quarterly revenue missed estimates.
The Stoxx Europe 600 Index gained 0.3 per cent to 341.89 at the close of trading in London. Germany’s DAX rose 0.5 per cent and France’s CAC 40 added 0.3 per cent.
US stocks were mostly flat in early trading yesterday as the benchmark S&P 500 retreated slightly from an intraday record. Homebuilders were among the biggest gainers on the day. DR Horton rose 1.8 per cent to $23 while Lennar added 2.2 per cent to $40.11 and PulteGroup was up 2.1 per cent at $19.24. Whirlpool sank the most since February following an analyst downgrade.
Keurig Green Mountain was the S&P 500’s biggest percentage gainer in early trading, up 9.6 per cent at $121.30 after Coca-Cola said it will raise its stake in the company from 10 per cent to 16 per cent.