Markets

European shares steady after oil gain

Iseq slips 0.2% while on Wall Street technology recovers from losses in prior session

Ryanair, which was under pressure in the previous session, added 0.4 per cent and closed at €16.42. Photograph: Andrew Yates/Reuters

Tue Sep 26 2017 - 21:55

European shares steadied on Tuesday, helped by gains in some big oil stocks and Nestlé after the food giant surprised investors positively by setting margin targets for the first time.

Investors remained cautious, however, as tensions over North Korea persisted and while they awaited further clues on whether US interest rates will rise in December.

DUBLIN

The Iseq index slipped 0.2 per cent in line with the London market. Building materials group CRH, the largest stock on the Dublin market, fell about 0.5 per cent to €30.45, following a similar decline on Monday. Ryanair, which was under pressure in the previous session, added 0.4 per cent and closed at €16.42.

Providence Resources, which confirmed its Stena IceMax drillship has departed the Druid Drombeg well, dropped 9.5 per cent.

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Paper and packaging group Smurfit Kappa was 0.4 per cent weaker at €26.42, while Dalata Hotel Group lost 0.5 per cent, finishing at €5.54.

Bank of Ireland and AIB both advanced despite pressure on bank stocks, while Independent News & Media lost 0.9 per cent to finish just below 11 cent.

LONDON

The UK’s top share index fell for a second day on Tuesday, although a rise in oil prices lifted energy stocks and a broker upgrade gave support to British American Tobacco. Britain’s blue chip FTSE 100 index fell 0.2 per cent, weighed down by financials, while mid-caps slipped 0.3 per cent on sharp, results-driven falls.

Brent crude oil touched its highest level in more than two years, before easing back on profit taking. Shares in Royal Dutch Shell rose around 0.8 per cent, while Tullow Oil added 1.3 per cent in its primary London listing.

Tour operator Thomas Cook fell 3 per cent after it said it had to deal with an "operationally challenging" past month after it provided support for 22,000 customers affected by Hurricane Irma. The travel group also said it had formed a strategic partnership with LMEY Investments to grow its own-brand hotel portfolio.

Card Factory was the biggest faller on the FTSE 250 after the retailer reported a sharp fall in half-year profits.

Shares in AA fell 10.7 per cent to an all time low after the British motoring group announced it would have to raise capital expenditure.

British American Tobacco rose 1.4 per cent, reversing earlier losses, helped by a an upgrade to outperform from analysts at Cowen and Company.

EUROPE

The pan-European Stoxx 600 ended little changed, near 10-week highs hit in the previous session, while Germany’s Dax added 0.1 per cent and Spain’s Ibex fell 0.3 per cent.

Nestlé provided the biggest uplift to the Stoxx by a single stock, rising 1.8 per cent. The world's largest packaged food company set a profit margin target for the first time, responding to an industry slowdown and pressure from activist investor Third Point for near-term returns from the group.

Adidas was a weak spot, down 2.4 per cent. US prosecutors on Tuesday charged 10 people including James Gatto, director for global sports marketing for basketball at the sportswear group, with bribery and fraud in connection with college recruiting.

German industrial group Siemens, which may decide on Tuesday to pursue a multibillion-dollar rail merger with French rival Alstom, was flat. Carrefour rose 3.5 per cent on vague market talk of a possible takeover bid from Amazon.

NEW YORK

The S&P 500 ended flat on Tuesday and the Nasdaq posted modest gains as technology shares bounced from sharp losses in the prior session and comments from Fed Chair Janet Yellen boosted expectations of a December rate hike.

Ms Yellen said the Fed needs to continue gradual rate hikes and it would be imprudent to leave rates on hold until inflation reached the Fed’s 2-per cent target.

Technology, up 0.4 per cent, was the best performing major sector, recovering somewhat from losses in the prior session. Tech shares suffered their worst one-day drop in five weeks on Monday as concerns over tensions with North Korea prompted investors to book profits in what has been the best performing sector this year.

Apple rose 1.72 per cent after four straight sessions of losses to help prop up the three major indexes, after Raymond James boosted its price target on the iPhone maker to $180 from $170.

Red Hat rose climbed 4.09 percent after the Linux distributor's quarterly profit came in above estimates and the company raised its full-year forecast.

The Dow Jones Industrial Average fell 10.05 points, or 0.05 per cent, to 22,286.04, the S&P 500 gained 0.23 points, or 0.01 per cent, to 2,496.89 and the Nasdaq Composite added 9.57 points, or 0.15 percent, to 6,380.16.

(Additional reporting: Bloomberg / Reuters)

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