European markets plateau after stocks surge to 14-month high

Rising bets for Federal Reserve interest rate rise stoke optimism about global growth

Traders prepare for the initial public offering of Snap Inc, the parent company of Snapchat, at the New York Stock Exchange in New York. Photograph: Justin Lane/EPA

Traders prepare for the initial public offering of Snap Inc, the parent company of Snapchat, at the New York Stock Exchange in New York. Photograph: Justin Lane/EPA

 

European markets plateaued on Thursday following a surge on the previous day as investors weighed the likelihood of a US interest rates rise.

DUBLIN

The Irish market mirrored the rest of Europe, but a number of leading stocks gave ground following a good performance on Wednesday.

AIB’s shares closed 2.94 per cent up at €14 after the bank said it would start paying dividends and was ready to float the 99.9 per cent of its shares owned by the State.

Dealers noted that “all of 328 shares” in AIB changed hands and pointed out that as the stock is not really traded, its news was more of interest because it indicates that the bank is set to return to the market properly in coming months.

Building materials giant, CRH, which reported 41 per cent earnings growth this week, dipped 0.48 per cent to €33.125.

Ryanair closed 2.2 per cent down at €14.32, with most of the fall coming in the second half of the day.

Among smaller companies, two of the market’s real estate investment trusts (REITs) had a good day.

Green REIT ended the day 1.46 per cent up at €1.39 while Hibernian REIT added 1.38 per cent to close at €1.246.

Fruit seller Total Produce climbed 4.04 per cent to €1.93 after reporting that it made pre-tax profits of €50.6 million in 2016.

LONDON

Irish energy and distribution group, DCC, rose 19 per cent or 130 pence sterling to close at 6,990p, making it one of the biggest risers of the blue chip FTSE 100 on Thursday.

The index ended the day little changed, closing lower by a mere 0.55 points at 7,382.35 points.

Shares in outsourcing group, Capita, dragged the index after plunging more than 9 per cent or 51.5p to 513.5p amid a flurry of bad news for the business.

Dixons Carphone shares dropped 3.55 per cent or 11p to 299p following yesterday’s news that it would be booted from the blue chip index as part of the quarterly stock market reshuffle.

Merlin Entertainment shares dropped 3 per cent or 15.3p to 482p after saying it was still suffering from the Smiler rollercoaster crash at Alton Towers in 2015. The group said it saw “lower volumes” following the accident, but reported some signs of recovery.

Shares in Travis Perkins fell 6 per cent or 96p to 1,469p as the builders’ merchant and Wickes DIY chain owner posted a 67per cent slump in annual profits after taking hefty charges from branch closures and its troubled plumbing and heating business.

GoCompare shares fell 4 per cent or 4.5p to 94.5p after operating profits, which included its listing costs on the London Stock Exchange, came in 5 per cent lower at £21.9 million.

Cobham shares soared 13 per cent or 16.4p to 138.6p are announcing it would launch another £500 million rights issue as part of efforts to pay down its debt pile.

EUROPE

The Stoxx Europe 600 Index fell less than 0.1 per cent lower. Stocks surged to a 14-month high yesterday, led by banks and miners, as rising bets for a Federal Reserve interest-rate increase stoked optimism about global growth.

Healthcare shares rallied, boosted by a 7 per cent gain in Roche Holding AG after its breast cancer medicine Perjeta succeeded in the company’s most anticipated patient study, a key step for a franchise that could exceed $9 billion in sales by 2021.

Subsea 7, the Norwegian oil services company, was up 5.5 per cent after it posted a fourth-quarter earnings beat and said it would pay a special dividend.

The firm had been a short-selling target, with 8.8 per cent of it shares outstanding on loan according to IHS Markit, though this number diminished 10 per cent in the past month.

Engie, the French gas and power company, led the top-gaining utilities sector, up 8.2 per cent and marking its best day since late 2008 after it posted 2016 earnings in line with analysts’ expectations.

US

Wall Street focused on social media company Snapchat’s $22 billion flotation on Thursday.

However, markets were down as investors booked profits from a record run on Wednesday.

Caterpillar fell nearly 5 per cent and was responsible for more than half of the 66-point decline on the Dow, after law enforcement officials searched its facilities in Illinois.

Kroger slipped 3 per cent after the supermarket operator reported a surprise decline in holiday-quarter same-store sales. Monster Beverage was the biggest percentage gainer on the S&P, rising 13.7 percent following a quarterly revenue that beat analysts’ average estimates.

– (Additional reporting: Bloomberg, Reuters)