Inflation fears slow gallop of European stocks

Inflation fears kept European stocks below record highs on Wednesday, overshadowing positive news about rising business activity.

Dublin

News that the State intends selling off its shares in Bank of Ireland in stages over six months was one the day's main talking points. Dealers noted that investors were "not enthusiastic" about the approach Minister of Finance, Paschal Donohoe, was taking to offloading the Government's 13.9 per cent stake in the lender.

Bank of Ireland closed 1.96 per cent down at €4.402. Shares touched a low of €4.203. The Government has hired Citigroup to dripfeed the stock into the market over the next six months.

In contrast, AIB climbed 1.05 per cent to €2.216 after announcing a partnership with Irish Life owner, Great West Life. "That was received really well," said one broker.

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Kingspan and Kerry shine as European markets advance

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Canada's decision to liberalise sports betting lifted Paddy Power owner, Flutter Entertainment, which has operations in the north American country following a merger last year. The stock closed just marginally down at €162.45, but traded up to €166.10 at one point after opening at €162.60.

Building materials giant and index heavyweight, CRH, fell 1.42 per cent to €42.41 on a day when investors were generally lukewarm towards its industry.

Food group, Kerry, which has enjoyed a strong few days on the back of news of two deals, added close to another per cent to €113.20.

Insulation and building materials business, Kingspan, which issued a positive trading statement this week, dipped 0.27 per cent to €81.86. However, dealers pointed out that it rose 7 per cent on Tuesday, so largely kept most of those gains.

London

Pharmaceutical giant, Glaxosmithkline, rose 1.2 per cent to 1,411.6 pence sterling as it set out plans to turn its consumer healthcare arm, Aquafresh and Panadol, into a separate company.

Phoenix Group dipped in value after the insurance firm confirmed to investors that reinsurance specialist Swiss Re had sold its 6.6 per cent stake in the London-listed company.

Shares in Phoenix dropped 2.5 per cent to 676p at the close after Swiss Re said it sold its shares in a £437 million move.

BT Group was one of the FTSE's main risers after brokers at Barclays said its shares have the potential to rise almost 50 per cent to 300p.

Barclays said increased visibility of returns in BT’s digital network business, Openreach has driven positivity as shares lifted by 1 per cent to 205.3p at the close.

Europe

A survey showed that euro zone business growth accelerated at its fastest pace in 15 years in June as the easing of lockdown measures unleashed pent-up demand and drove a boom in the dominant services sector but also led to soaring price pressures.

French and German stocks were among the biggest fallers. Gucci and Balenciaga owner Kering, slid 2.95 per cent to close at €739.40 in Paris, while rival Hermes was down 1.5 per cent at €1,205.

Analysts at HSBC downgraded luxury goods makers saying the market "could be as good as it gets".

Irish Distillers parent, Pernod Ricard, raised its annual profit forecast as the French drinks maker saw a stronger than expected recovery with the removal of Covid-19 curbs. Its shares rose 2 per cent to a record €183.50.

Italian cement maker Buzzi closed 1.5 per cent off at €22.06, reflecting general weakness in its industry that also hit Irish giant CRH's shares.

US

The tech-heavy Nasdaq hovered near its all-time high on Wednesday, helped by a boost from Tesla shares, with investors cheering data that showed a record peak for US factory activity in June.

Tesla gained 4.3 per cent as the electric vehicle maker opened a solar-powered charging station with on-site power storage in China and as bitcoin prices retraced some losses.

Nikola gained 3 per cent after the electric and hydrogen vehicle maker said it would invest $50 million in Wabash Valley Resources to produce clean hydrogen in the US Mid-West for its zero-emission trucks. Additional reporting Reuters