European shares back on track as banks in focus

European shares rebounded further yesterday as investors speculated a sell-off that spurred their worst week since February was overdone, and banks advanced.

The Stoxx Europe 600 Index added 0.8 per cent, paring an earlier rise of as much as 1.4 per cent. Speculation the Federal Reserve will slow its pace of rate increases amid weak US data bolstered shares, while the euro weakened against the dollar for a fifth straight day after last week reaching its highest level since August.

DUBLIN

The Iseq index of leading shares followed other European markets higher, closing up 67.64 points to 6,166.86.

Among the main movers were Kerry Group, which ended the day up 0.50 per cent to €80.41 after it was confirmed that chief executive Stan McCarthy had stepped down as head of the company's biggest shareholder, Kerry Co-Op.

Bank of Ireland also closed higher, up 3 per cent to 24 cents, as the European banking sector gained from improved investor sentiment. BoI said it would not be pursuing a further appeal after the UK Court of Appeal ruled against it in a long-running tax avoidance dispute with authorities over a £27 million (€34.3m) bill relating to its subsidiary, Bristol & West.

Construction group CRH gained 1.50 per cent to close at €25.73 while other notable stocks on the day included Glanbia, down 1.75 per cent to €16.58, and Ryanair, up over 2 per cent to €13.12.

LONDON

Britain’s leading stock index rose, lifted by gains for shares in budget airline

EasyJet

and support services group Capita.

The FTSE 100 index was up 0.7 per cent at 6,156.65 points by the close.

Capita rose 5.3 per cent, making it the top FTSE 100 gainer, after the company expressed increasing confidence over its 2016 prospects. The stock had hit its lowest levels in two years earlier in the week.

Shares in EasyJet gained 2.7 per cent. Even though the airline reported a half-year loss, traders and analysts were reassured by its assertion that it was on track to meet market expectations for full-year results, and were encouraged by its plans to boost its dividend payout ratio.

Hotel Chocolat Group surged 28 per cent on its London trading debut.

EUROPE

Financial services group

ING

gained 2.7 per cent after its earnings beat estimates.

Pandora

jumped 11 per cent after the Danish jeweller raised its full-year profit forecast. Elsewhere,

Nokia

slid after its revenue missed analysts’ estimates and costs related to its purchase of

Alcatel-Lucent

pushed the company to a net loss.

The company’s refusal to detail how it planned to shore up falling profits in the longer run led Nokia shares to fall sharply in late afternoon trading, closing down 7.2 per cent at €4.65 in Helsinki.

Greek shares hit their highest level in 2016 after eurozone finance ministers offered to grant Greece some debt relief, with the move causing Greek 10-year bond yields to fall below 8 percent for the first time since early December.

NEW YORK

US stock rose strongly in late morning trading, helped by a rally in financial shares and with commodity prices boosting energy and industrial stocks.

Amazon

jumped as much as 3.2 per cent to a record high of $701.40, after Bernstein set a $1,000 price target on the stock.

The Dow Jones industrial average was up 173.37 points, or 0.98 per cent, at 17,879.28, the S&P 500 was up 18.39 points, or 0.89 per cent, at 2,077.08 and the Nasdaq Composite was up 32.58 points, or 0.69 per cent, at 4,782.78.

Allergan was up 5.9 per cent at $226.46 after the Botox maker reported a better-than-expected quarterly profit.

Goldman was up 2 per cent and JPMorgan up 1.4 per cent. Gap tumbled 12.7 per cent to $19, after the retailer reported a decline in sales for the fifth straight quarter. – (Additional reporting: Reuters)