Banks lead European stocks higher as telecoms weigh

European stocks recovered on Tuesday, led by the banks, while tech stayed under pressure after concerns over increased regulation and taxation of large companies in the sector prompted selling overnight on Wall Street.

The pan-European STOXX 600 index ended 0.5 per cent higher, while Britain’s FTSE rose 0.3 per cent after hitting a 15-month low in the previous session.

DUBLIN

It was a sluggish day following the bank holiday, with the Iseq index closing down half a per cent to 6.625.77.

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Ryanair, which was in the news after announcing plans to take a big stake in Austrian airline LaudaMotion, underperformed its peers. It closed down 0.4 per cent to €16.49 on a day in which rival EasyJet rose.

Smurfit Kappa was 2 per cent lower at €34.56 on increased investor activity following last week's €8.6 billion takeover proposal from International Paper.

Positive UK housebuilding news failed to lift Cairn or Glenveagh. Both closed down over 1 per cent to €1.85 and €1.07 respectively.

Irish lenders ran against the generally supportive trend for banks. Permanent TSB remained under pressure with its share price down 4.5 per cent to €1.88. AIB and BoI were also down nearly 1 per cent.

Bookies were generally weak across Europe and Paddy Power Betfair was no exception. It closed 2.2 per cent lower at €84.66.

LONDON

Britain’s FTSE 100 index gained on Tuesday, with banks leading the way after data showed a small slowdown in inflation.

In the second approach for a UK mid-cap firm in as many days, Fenner jumped 24 per cent to the top of the FTSE 250 after France's Michelin made a £1.2 billion bid for the engineering company.

The FTSE 100 was up 0.3 per cent at the close, with housebuilders Taylor Wimpey, Berkeley Group and Persimmon among the biggest gainers. Bellway jumped 3.5 per cent.

Banks contributed most to keeping the index in positive territory. Lloyds was up 1.1 per cent, and HSBC gained 0.7 per cent.

Software company Micro Focus, which lost 46 per cent of its market value in the previous session after its chief executive quit and it cut its revenue outlook, staged a small recovery, gaining 3.6 per cent.

Sophos tumbled 9.2 per cent to the bottom of the FTSE 250 as traders flagged concern over leverage after the blow-up at Micro Focus, and as tech companies came under increased scrutiny globally.

EUROPE

Shares in German software maker SAP fell 0.5 per cent on a negative read across from disappointing results at US peer Oracle, which reported that sales from its cloud business fell short of Wall Street expectations. "[The] hiccup in Oracle's cloud business could hurt SAP sentiment," said a trader in Frankfurt.

Telecoms stocks were among the worst performers, weighed by Swisscom and Sunrise, which turned sharply lower after rival Salt Mobile said it would enter the Swiss fixed-line market. The two Swiss operators dropped 4.6 to 6.4 per cent.

A sell rating from UBS sent shares in France's BIC down 6.8 per cent to the bottom of the STOXX.

NEW YORK

US stocks rose in early trading with energy stocks leading the way on a jump in oil prices. But another drop in Facebook's shares kept the gains on the Nasdaq Composite and the S&P in check.

Shares of Facebook fell more than 5 per cent after Bloomberg reported the US Federal Trade Commission is investigating the social network company over its use of personal data.

The S&P 500 technology index, after a fleeting advance at the open on Tuesday, was back in the red, adding to losses on Monday as Facebook’s data privacy issues hit the sector on fears of increased regulation over how companies use data.

While all the attention was firmly on Facebook, Oracle was the biggest percentage decliner on the S&P 500 early on Tuesday, falling 9 per cent after the business software maker reported quarterly revenue that missed Wall Street estimates on disappointing sales from its cloud business. – Additional reporting: Reuters