Strong-performing banks lift European shares

European shares rose on Friday aided by a strong performance from the region’s banks.

DUBLIN

The Irish market performed in line with its European peers. Banks rose on news that ratings agency Standard & Poors was upgrading them.

Bank of Ireland rose 3.33 per cent to 24.8 cent while home lender Permanent TSB added 1.85 per cent to close at €2.75. AIB shed 0.1 per cent to €5.195.

Shares in index heavyweight, building materials giant, CRH, increased 2 per cent to €33.12 on the back of strong performances from businesses in related sectors such as Grafton.

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The Irish company is widely seen as being in pole position to gain should incoming US president Donald Trump’s deliver on his infrastructure spending plans as it is one of the biggest building materials suppliers in the US.

Insulation specialist Kingspan also performed strongly, adding 1.28 per cent to €27.74.

LONDON

The blue chip FTSE 100 shrugged off superstition and posted its 12th consecutive record close on Friday the 13th, as the pound shed some gains and house-building stocks pulled higher.

Irish DIY and builders’ merchant specialist, Grafton, climbed 8.42 per cent to close at 586 pence sterling after issuing a trading statement saying that revenues rose 13.4 per cent to £2.51 billion.

In a related sector, house builder Barratt Developments rose 3.6 per cent to 516p, regaining ground after a dip on Thursday when the housebuilder reported a 6 per cent drop in total home completions in the six months to the end of December.

It helped buoy the stock prices of home improvement retailer Kingfisher up 2.6 per cent to 353p, and house builders Persimmon up 1.3 per cent to 1,997p, and Taylor Wimpey up 0.9 per cent to 172.6p.

In other UK stocks, ITV rose 2.8 per cent to 208.6p as Goldman Sachs and JPMorgan raised their price target for the stock.

EUROPE

Shares in French media company Technicolor fell 19.7 per cent in their worst ever one-day loss after a profit warning. The European banking index was the top sectoral gainer, up 2 per cent, helped by strong earnings from large lenders in the US and the outlook for higher interest rates in the world's largest economy.

The European auto index rose 0.8 per cent. The index came off earlier highs after reports that French prosecutors were investigating Renault over suspected emissions cheating sent shares in the French carmaker down 2.9 per cent, partly offsetting a rebound in Fiat Chrysler. The Italian carmaker recouped some of its previous session's 16 per cent slump.

That was triggered by the US Environmental Protection Agency's (EPA) accusations that the carmaker illegally masked excess diesel emissions. However, chief executive Sergio Marchionne told La Repubblica newspaper that the EPA's accusations would not have any impact on the carmaker's targets. Italian stocks dominated the list of top performers on the STOXX.

Investment company Exor, which has a stake in Fiat, rose more than 6 percent. UBI Banca surged 9.6 per cent, the top STOXX gainer following the bank's forecasts on Thursday to generate a net profit of €1.2 billion by 2020, up from €900 million under its current business plan.

US

The S&P 500 and Nasdaq trimmed early gain but remained higher in early afternoon trading on Friday after strong earnings from US lenders.

Bank of America jumped as much as 2.1 per cent to $23.41, their highest since the financial crisis. JPMorgan surged 2.2 per cent at a record high of $88.17 and Wells Fargo gained 3.1 per cent to $56.20.

The Nasdaq Composite was up 29.85 points, or 0.54 percent, at 5,577.34. It had hit a record high earlier in the day. The biggest boost was from Facebook, which jumped 1.6 percent to $128.65 after Raymond James upgraded the stock.

– (Additional reporting: Reuters)