European markets rise despite UK recession

US stocks also bounce back on Wednesday, shaking off stimulus concerns

European shares rose for a fourth consecutive day as investors shrugged off dismal UK economic data that showed a 20.4 per cent contraction in gross domestic product (GDP) in the second quarter, and instead eyed signs of a rebound.

Oil and gas stocks were among the best performers thanks to optimism over future demand, while in the US, the Dow Jones bounced back strongly amid wider optimism as investors moved on from earlier concerns over the prospects of a US economic stimulus deal.


The Iseq index added 0.8 per cent in line with the improving sentiment across European markets, despite falls for financial stocks and Glanbia.

The food group closed down almost 4.2 per cent at €9.20 after its half-year earnings revealed the extent to which its performance nutrition business had been affected by the Covid-19 crisis. The company signalled that the short-term outlook remained uncertain, despite consumers’ increased focus on health.

Bank of Ireland fell 4.1 per cent to just below €2, while AIB finished down 4.4 per cent at €1.10. Permanent TSB nudged down 0.2 per cent. The bank confirmed that newly appointed chief executive Eamonn Crowley has completed the purchase of 50,000 shares in the group at 49 cent each.

Aryzta had a weak day, with the Swiss-Irish baked goods company dropping 7.9 per cent on its Dublin listing to close at 58 cent. Ryanair also ended in the red, dropping 0.4 per cent to €12.54, but packaging giant Smurfit Kappa added 1.4 per cent to €30.68, and cement-maker CRH rose 1.9 per cent to €34.19.


Despite the UK plunging into recession with the worst contraction in GDP since the measurement began, equities made gains. The exporter-heavy Ftse 100 benefited from weakness in sterling and rose 2 per cent, outperforming the major markets in Europe, while the more domestically focused Ftse 250 added 0.5 per cent.

Online retailer Asos soared 13.3 per cent after it upgraded its outlook for full-year revenues and profits, and said customers were returning items at lower levels than expected amid a shift to more "deliberate purchasing".

Just Eat Takeaway added 3.7 per cent after customer numbers grew in the first half of the year and it added a record number of restaurants to its platforms, while HSBC Holdings closed 3.2 per cent higher.

But Avast fell 3 per cent after the cybersecurity company said profits for the first half of 2020 fell almost 17 per cent despite an increase in revenues, while Aer Lingus owner IAG was also among the fallers, ending the session down 2.5 per cent.


After struggling for traction early on, the benchmark Stoxx 600 extended gains over the course of the session and finished up 1.1 per cent. The German Dax and the French Cac 40 both added about 0.9 per cent, with technology stocks among those to underperform.

Among individual stocks, ABN Amro rose 8 per cent after it announced plans to cut back on its investment bank activities and shut down lending outside Europe. The Dutch bank is trying to turn around business hit hard by market chaos caused by the coronavirus crisis.


Wall Street equities approached all-time highs in early trading as stocks rallied, with investors snapping up shares that had suffered recent declines.

Technology stocks all rebounded, with Apple rising 3.4 per cent and Amazon and Microsoft both up about 2.8 per cent shortly before 6pm Irish time.

Electric vehicle manufacturer Tesla was a standout performer, advancing 10.2 per cent, on a day when it said it would split its shares in a five-for-one exchange – a move designed to make the stock less expensive for individual investors. Tesla's shares have more than quadrupled since March. – Additional reporting: Bloomberg/Reuters