European shares extend rally amid vaccine and stimulus optimism

Betting giant Flutter Entertainment, IAG and Ocado strong performers and book gains

The New York Stock Exchange: US and European equities extended their weekly gains on Wednesday. Photograph: Michael Nagle/Bloomberg

The New York Stock Exchange: US and European equities extended their weekly gains on Wednesday. Photograph: Michael Nagle/Bloomberg

 

European shares rose for a third straight day on Wednesday as optimism around a potential Covid-19 vaccine and comments from European Central Bank (ECB) president Christine Lagarde offset worries of economic damage from surging infections.

Stocks extended their gains after Ms Lagarde said the central bank will focus on more emergency bond purchases and cheap loans for banks when it puts together its new stimulus package next month.

DUBLIN

The Iseq continued its upward run with a 1.8 per cent gain. After dipping earlier in the session, Ryanair closed up 0.7 per cent at €15.46, extending its recent gains, while packaging giant Smurfit Kappa finished 2.2 per cent higher at €37.02.

CRH, the biggest stock on the Iseq, added 0.85 per cent, with the cement-maker closing the session at €34.23. There was also a gain for Dalata Hotel Group, with its share price surging 5.3 per cent to €3.50.

But after rising more than 5 per cent in the previous session, Bank of Ireland was in the red on Wednesday, finishing down 3.5 per cent at €2.46.

It was a better day for Paddy Power owner Flutter Entertainment, which added 5.2 per cent to €150.60, after it reported a 30 per cent rise in revenues to £1.3 billion (€1.45 billion) in the third quarter and upgraded its full-year earnings guidance. Food group Glanbia, meanwhile, advanced 3.6 per cent to €9.58.

LONDON

The FTSE 100 posted its eighth consecutive rise, adding 1.35 per cent, while the mid-cap FTSE 250 swelled 1.6 per cent.

BAE Systems closed up 2.55 per cent after pushing its forecasts higher as a lower tax bill offset poor exchange rates. The defence, security and aerospace company said it was now expecting orders to be above its pre-Covid predictions.

Aer Lingus owner International Consolidated Airlines Group (IAG) was one of the biggest risers on the blue-chip index, soaring 8 per cent to 148.7 pence.

Online grocery platform company Ocado also had a good day, surging 6.4 per cent to 2,302 pence. The stock fell on Monday as investors sold companies enjoying buoyant trade throughout the pandemic.

Rolls-Royce was one of the biggest fallers, declining 8 per cent on a day when it said it could create 6,000 jobs in the UK over the next five years through a plan to build 16 mini-nuclear plants.

EUROPE

The pan-European Stoxx 600 jumped 1 per cent, building on a 6 per cent rally this week as investors bought into utilities as well as travel-related stocks, a sector that has widely underperformed this year.

Technology stocks, which have tracked a surge in their US counterparts since the coronavirus-driven crash in March, gained 2 per cent.

In Frankfurt, the DAX rose 0.4 per cent, while the CAC 40 advanced 0.5 per cent in Paris. Spanish and Italian stocks also rose.

Among individual stocks, E.ON, Germany’s largest energy firm, gained 1 per cent after it said demand had recovered faster than expected from the coronavirus crisis, while maintaining its 2020 forecast.

Dutch bank ABN Amro slid 5.6 per cent as it remained cautious despite reporting a much better-than-expected quarterly profit, while Nordea Bank fell 5 per cent after Finnish insurer Sampo said it had sold 4 per cent of the share capital in the bank in an offering to institutional investors.

NEW YORK

Wall Street climbed as giant tech companies rallied in a shift back to the safety trade that has powered this year’s gains amid speculation the economic recovery will be slow with a virus resurgence. The S&P 500 rose toward a two-month high, while the Nasdaq 100 jumped more than 2 per cent.

Apple and Amazon. com surged alongside some stay-at-home shares that were hit hard by this week’s sell-off such as Zoom Video Communications.

– Additional reporting: Reuters/Bloomberg

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