Stocks hold steady despite Deutsche Bank slip
Gains for luxury goods sector offset drops for banks as German lender posts surprise loss
There were gains for airlines Aer Lingus and Ryanair with the former climbing 1 per cent to €1.46 and the latter nudging up 0.2 per cent to €6.68. Ryanair is looking to tap capital markets directly for the first time as it prepares to take delivery of Boeing aircraft. Photograph: Alan Betson
European stocks were little changed, holding onto most of the gains it has made so far this year on the back of higher global growth forecasts from the World Bank and a rally in mining companies. In
yesterday’s trading, a decline in bank shares offset advances for luxury-goods stocks.
The main market-influencing data came from China, where economic growth slowed in the fourth quarter. Gross domestic product rose 7.7 per cent from a year earlier, compared with 7.8 per cent in the third quarter, while the annual increase in industrial production came in slightly below forecasts.
US equity markets were closed for a holiday marking the birthday of civil rights leader Martin Luther King, Jr, which had a knock-on effect on trading volumes in Europe.
The Iseq fell 0.2 per cent on a day of few significant swings for the major stocks. Building materials group CRH, the largest constituent of the index, ended the session down 0.85 per cent at €19.84,while insulation-maker Kingspan also declined, closing down 1.5 per cent at €13.39. Drinks group C&C fell 0.7 per cent to €4.24.
There were gains for airlines Aer Lingus and Ryanair, however, with the former climbing 1 per cent to €1.46 and the latter nudging up 0.2 per cent to €6.68. Ryanair is looking to tap capital markets directly for the first time as it prepares to take delivery of Boeing aircraft, senior executive James Dempsey said yesterday.
Paper and packaging group Smurfit Kappa rose 1.6 per cent to €19.11. The stock is being supported by upward price momentum for its products. Bank of Ireland advanced 0.7 per cent to 30 cent as it managed to avoid the negative sentiment towards European financial stocks in the wake of Deutsche Bank’s unexpected losses. AIB fell 2.7 per cent to 15 cent.
The FTSE 100 index added 0.1 per cent, holding steady after two weeks of gains. The jump in stock values since the start of 2014 has prompted some market-watchers to suggest that investors will be tempted to consolidate their gains in the days and weeks ahead.
Hargreaves Lansdown climbed 3.9 per cent as analysts at Credit Suisse Group upgraded the UK’s biggest retail stockbroker.
Barclays retreated 2 per cent to 282.8p, while RBS slipped 1.3 per cent to 359p, as both banks were dragged down by Deutsche Bank’s reporting of a surprise loss some 10 days ahead of when it was scheduled to update the market.
BSkyB gained 1.7 per cent to 854p as people familiar with the matter said the UK’s largest pay-TV provider and Vodafone Group have discussed offering UK customers packages of television, internet, mobile and home-phone services.
Mothercare jumped 6.3 per cent to 289p after the Sunday Times reported that Tesco may make an offer for the baby-products chain.
National benchmark gauges fell in 11 of the 18 western European markets, with Germany’s DAX sliding 0.3 per cent and France’s CAC 40 lost 0.1 per cent.
Deutsche Bank dropped the most since September 2012 after it reported a fourth-quarter loss. Germany’s largest lender closed down 5.4 per cent at €37.21. It posted a pretax loss of €1.15 billion in the fourth quarter because of €528 million in litigation-related expenses, costs tied to its reorganisation and charges to adjust credit, debt and funding valuations, it said. Analysts had been expecting a profit.
Banks, insurance companies and financial-services providers posted the biggest losses among the 19 industry groups in the Stoxx 600. Commerzbank declined 4.5 per cent to €12.94, while Credit Suisse Group retreated 2.5 per cent to 29 Swiss francs.
Luxottica Group rose 4 per cent to €38.90 after analysts at Deutsche Bank advised investors to buy shares in the maker of Ray-Ban sunglasses. – (Additional reporting: Bloomberg)