European stocks rise amid record highs on Wall Street
Vodafone surge and US earnings lend support to equities in final session of week
Vodafone plans to create a separate European mobile masts company. Photograph: Fabrizio Bensch/Reuters
European stocks nudged up in the final session of the week, as British, German and French stocks all finished higher. The tentative recovery came amid gains for telecoms and media stocks such as Vodafone and Vivendi, while solid earnings at several US companies also helped investors overcome disappointment at the European Central Bank (ECB) decision not to cut interest rates.
Wall Street reached record highs after results from Alphabet and Twitter.
The Iseq index slipped 0.6 per cent, going against the generally positive trend for the major European indices. AIB fell 3.8 per cent to €3.51 on a day when it disappointed investors by reporting a 43 per cent drop in pre-tax profit in the first half. It had earlier dropped as much as 5.6 per cent after it gave an update on its exposure to the tracker mortgage scandal.
Index heavyweight CRH provided some support to the market, with the cement-maker advancing 1 per cent to €30.14. Dalata Hotel Group rose 2.5 per cent to almost €4.86.
But Ryanair, which reports quarterly figures on Monday, and Smurfit Kappa were both fallers. The airline lost 3.6 per cent, closing at €10.02 for its second consecutive day in the red, while the packaging group closed 2 per cent lower at €29.18.
The FTSE 100 added 0.8 per cent, buoyed by an announcement from Vodafone and weakness in sterling, which helped the major exporters listed on the blue-chip index. The mid-cap FTSE 250 posted a more modest 0.2 per cent climb.
Mike Ashley’s Sports Direct fell 3.9 per cent after it delayed its already postponed full-year results, prompting analysts to speculate that deep problems may have arisen from its acquisition of troubled retailer House of Fraser. Mothercare slumped 13.9 per cent after it said an uncertain British retail market would stall growth.
Gains were led by Vodafone, which said it planned to create a separate European mobile masts company. This helped its stock enjoy its best day in more than 16 years with a surge of 10.6 per cent.
Pearson advanced 5.9 per cent after it appeared that a strategy to shift away from traditional textbooks to digital was paying off for the educational publisher.
But Anglo American dropped 4.1 per cent after the miner’s biggest shareholder said he was divesting his near 20 per cent stake and as copper prices fell.
The benchmark Stoxx Europe 600 index increased 0.3 per cent. In Frankfurt, the Dax added almost 0.5 per cent, while the Cac 40 in Paris finished about 0.6 per cent higher. Spanish and Italian stocks fell, however.
Shares in luxury goods group Kering plunged 7 per cent after a second-quarter sales miss at its red-hot Italian brand Gucci sparked fears the label may be falling out of favour with US and Chinese customers.
French media group Vivendi climbed 6 per cent in a week in which it appointed banks to advise on the sale of its stake in Universal Music Group.
Robust earnings from Google-parent Alphabet and Twitter took the S&P 500 and Nasdaq indexes to record highs, with support from data that showed the US economy slowed lesser than expected in the second quarter.
Alphabet shares jumped the most in four years after it reported revenue that beat Wall Street expectations, calming concern about slowing growth. The stock surged 11 per cent in early trading. Twitter climbed 8.9 per cent after it posted better-than-expected second-quarter revenue.
McDonald’s rose as much as 2 per cent to a record high, becoming the third major restaurant chain to hit a peak this week, after its quarterly US sales beat expectations.
– Additional reporting: Reuters/Bloomberg