European shares ended lower on Thursday, weighed by weakness in commodity-related stocks amid declining oil and metal prices, and breaking a record-breaking six-day rally fuelled by strong earnings. The pan-European Stoxx 600 index dropped 0.5 per cent, its first fall in seven sessions, with energy stock and miners dropping about 2 per cent each. Oil stocks were hit by plunging crude prices on worries of a supply overhang and the prospect of China moving to release strategic fuel reserves, while miners slipped as copper prices fell to their lowest in more than a month.
European stocks started the day on stable footing, with Germany’s Dax, Switzerland’s SMI and France’s Cac 40 all touching record highs earlier in the session, but giving up those gains by the close. Stronger-than-expected earnings season and accommodative monetary policy have helped drive the Stoxx 600 to record highs recently. However, uncertainty has crept in about a resurgence in Covid-19 cases and the extent of restrictions needed to curb the spread of the disease.
Bank of Ireland rose 2 per cent to €5.17 after the State reduced its stake in the lender to below 9 per cent, continuing to drip-feed stock into the market. Minister for Finance Paschal Donohoe announced in June that the Government would sell much of its 13.9 per cent stake in Bank of Ireland – held through the Irish Strategic Investment Fund – this year. AIB rose marginally to €2.16.
Paddy Power Betfair owner Flutter fell 1. 6 per cent to €136.90 after the company announced plans to buy online bingo operator Tombola for more than £400 million (€478 million). The terms will see Flutter pay £402 million in cash upon completion, with approval needed in the UK from the competition authority. Shares in Hibernia Reit fell by 1 per cent to €1.27 after the real estate investment trust reported profits after tax of €21.2 million for the six months to the end of September.
Daimler gained 1.7 per cent after Berenberg initiated coverage on the German car maker with a "buy", saying it expected the recently spun-off Daimler Truck to bring higher returns. Submarines-to-steel group Thyssenkrupp jumped 6.3 per cent after it said profit could more than double next year and it may take its hydrogen unit public. Playtech rose 3.9 per cent after receiving a takeover bid from JKO Play Ltd, a firm co-owned by former F1 boss Eddie Jordan. JKO joins several takeover bids for the British online gambling software developer. German auto supplier Continental fell 3.1 per cent after it announced the departure of its chief financial officer following a probe into the illegal use of defeat devices in diesel engines.
London's top market had another weak session as the Ftse 100 was dragged down by the oil majors and caution on Wall Street. BP and Shell helped to tip the Ftse into the red as their value waned on the back of crude oil prices tumbling to six-week lows. London was again the weakest performer of the day amid rising inflation concerns, but saw its European rivals finally join it in the red. The Ftse 100 closed 35.24 points, or 0.48 per cent , lower at 7,255.96 on Thursday. Elsewhere in company news, Royal Mail hit the top of the Ftse 100 after it revealed it would hand out £400 million to shareholders following a bumper period for the company during the Covid-19 crisis when online deliveries soared. Shares in the delivery giant leapt by 42.7p to 480.7p at the end of trading as revenues jumped from £5.7 billion to £6.1 billion and pretax profits rose from £17 million to £315 million in the six months to September 26th.
The S&P 500 and Nasdaq reversed course to edge higher in volatile trading on Thursday after a clutch of upbeat retail and technology earnings encouraged investors to shrug off hawkish comments on inflation from a Federal Reserve policymaker. Inflation remains front and centre for investors, and stock markets slipped after New York Federal Reserve Bank president John Williams said inflation was becoming more broad-based and that expectations of future price increases were rising. The indexes recovered as retail earnings from Macy's and Kohl's on the back of upbeat reports from Walmart and Target earlier this week signalled robust consumer demand.