European insurers up as costs of Hurricane Irma lower than expected

European shares closed higher on Monday as insurers benefitted from a drop in the estimated cost of Hurricane Irma and investors were relieved that North Korea celebrated its founding day without conducting a major missile test.

Investors who turned to safe haven assets such as bonds and gold in light of worsening tensions between US allies and North Korea, started to return to riskier trades including equities, helping give stock markets a lift.

DUBLIN

The Iseq nudged up 0.3 per cent in a quiet Monday session. Building materials group CRH, the largest stock on the index, advanced 0.5 per cent to €29.24. Paper and packaging group Smurfit Kappa finished flat at €25.60, while Ryanair closed almost flat at €18.04. Food group Aryzta fell almost 3 per cent to €25.85.

The main market news came from Providence Resources, which announced a "disappointing" well result from its interest in Drombeg off the southwest coast of Ireland, closed at 6.5 cents, down almost 17 per cent. The oil and gas exploration company said it would now plug and abandon the well.

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Real estate investment trust stocks Hibernia Reit and Green Reit climbed 1.8 per cent and 0.5 per cent respectively, while insulation-maker Kingspan rose 1.7 per cent to €34.06.

LONDON

The FTSE 100 of blue-chip stocks rose 0.5 per cent, underperforming other major European indices.

Insurance company Provident was the top gainer with a 3.8 per cent rise as other British financial shares rose in line with Europe and Wall Street after Hurricane Irma weakened to a category one storm and estimates of its cost dropped.

Precious metals miners Fresnillo and Randgold Resources were on the back foot as the price of safe-haven gold fell, while Primark-owner Associated British Foods was the biggest FTSE decliner, closing down 5 per cent. Although AB Foods increased its full-year outlook, investors were disappointed with a warning that the collapse of sterling was pushing up import costs.

BP rose after saying it planned an initial public offering of BP Midstream Partners in the fourth quarter this year.

Pharma heavyweight AstraZeneca rose 2.1 per cent after two of its drugs tackling lung cancer delivered impressive clinical results on Saturday. That helped it offset a big clinical trial setback in the disease in July that sent its shares down more than 15 per cent.

EUROPE

The pan-European Stoxx 600 rose 1 per cent. The insurance index posted its best performance since April with a 2.1 per cent jump after Irma’s downgrading to a tropical storm. In Germany, the Dax rose 1.4 per cent, while France’s Cac 40 closed up 1.2 per cent.

Among top gainers were reinsurers Hannover Re, which jumped 5.3 per cent, while Munich Re and Swiss Re rose by 4.1 to 4.3 per cent.

Banks also benefited from the insurers' rally and rose 1.5 per cent across all major bourses. Banco Santander, Commerzbank, Unicredit, and Credit Agricole rose between 2.5 per cent and 3.4 per cent.

Danish pharma stock Lundbeck slumped 13.8 per cent, making it the leading faller in Europe, after the resignation of its chief executive.

NEW YORK

Wall Street stocks rose towards a record, the dollar strengthened and Treasuries tumbled as investors piled into riskier assets. The S&P 500 Index headed for an all-time closing high and the Dow Jones Industrial Average topped 22,000.

Goldman Sachs' 1.8 per cent rise led the Dow higher in early trading, followed by insurer Travelers, which rose 2.94 per cent. Other insurers, especially the ones with exposure to Florida, also gained.

Apple rose nearly 2 per cent a day ahead of the launch of the new iPhone, providing the biggest boost to the Nasdaq and S&P. Tesla rose 4.6 per cent to $359.42 on news that China is studying when to ban the production and sale of cars using traditional fuels.

Additional reporting: Bloomberg/Reuters