Political nervousness in Spain and Italy impact on shares

Continued nervousness about politics in Spain and Italy left shares trailing on Tuesday.

DUBLIN

The Irish market played catch-up with peers following its bank holiday Monday break.

Packaging maker Smurfit Kappa was one of the most-traded stocks following its dramatic fall in London the previous day on news that rival International Paper was no longer interested in buying the Irish player.

Smurfit Kappa’s shares slid 6.89 per cent to close at €33.24 despite staging a slight rally in London. Investors sold more than 3.89 million of its stock in Dublin on Tuesday.

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AIB was flat at €4.85 despite reports from brokers that someone had placed an order for 1.5 million of the bank's shares.

Builder Cairn Homes gained 1.32 per cent to €1.838. Index heavyweight, building materials group CRH, crept 0.47 per cent up to €31.92.

LONDON

Aer Lingus owner International Consolidated Airlines Group (IAG) fell 3.49 per cent to 679.8 pence on Tuesday on fears about the impact of rising oil on the air travel industry, whose investors have enjoyed strong returns in recent years.

Willie Walsh, chief executive of the group, which owns British Airways and Iberia along with the Irish carrier, said that the threat of air traffic control strikes in Europe was having a bigger impact than rising fuel costs.

Irish packaging group Smurfit Kappa, which plunged 7.5 per cent in London on Monday following news that International Paper had dropped its bid, recovered some ground to close 1.39 per cent up at 2,920p.

Shares in Royal Bank of Scotland tumbled 5.15 per cent to 266p after the British government slashed its holding in the lender.

UK Government Investments sold 925 million of the Scottish bank’s shares at 271p each, cutting the public’s holding to 62.4 per cent from 70.1 per cent. British taxpayers took a £2.1 billion sterling loss on the sale.

British culture secretary Matt Hancock cleared the way for a bidding war with Rupert Murdoch's Fox for broadcaster Sky.

He told lawmakers that Sky News must be sold if Fox wants government approval for its £11.7 billion takeover. Mr Hancock cleared the way for a separate £22 billion bid from Comcast.

Johnston Press stock closed 1.38p down at 7.12p following a trading update confirming that revenues slumped 9 per cent in the period between January 1st and May 31st.

EUROPE

A buoyant European tech sector, which hit a 17-year peak on Tuesday, was not enough to lift the broader European market as jitters over politics in the periphery persisted.

Dutch chipmaker ASM was among the biggest gainers, up 5.8 per cent after Credit Suisse started coverage of the stock with an "outperform" rating, citing expectations of healthy growth due to the increasing complexity of semiconductors. SAP was up 1.2 per cent and Infineon gained 2.7 per cent.

Comments on Tuesday by Italy's new prime minister, Giuseppe Conte, promising to increase spending did not sit well with markets. Shares in Italian banks Intesa Sanpaolo, Unicredit and BPER all fell 3.4 to 3.8 per cent, among the biggest fallers on Europe's banks index, which was down 1.7 per cent, the biggest sectoral faller.

Air France KLM fell 4.97 per cent to €7 following a sharp rise in its price on Monday, sparked by news that hotel group Accor was seeking a stake in the airline.

US

Strong gains in tech heavyweights lifted the Nasdaq to a record intra-day high on Tuesday, while declines in financial and healthcare stocks weighed on the S&P 500 and Dow.

The so-called FAANG stocks – Facebook, Amazon , Apple, Netflix and Alphabet – rose between 0.3 per cent and 1.9 per cent, helping the S&P technology index rise 0.3 per cent.

Shares of US food companies Kellogg and General Mills fell about 2 per cent, while shares of AK Steel and US Steel also dropped 1.7 per cent.

Amgen's shares fell 2.9 per cent and pulled the S&P healthcare index lower after Mylan got regulatory approval for a biosimilar.

– Additional reporting: Reuters