European shares fall as Brexit doubts leave investors with no direction

Irish shares mostly flat and London mid-caps ease from 10-month high as clock ticks down

The German Dax gave up gains of as much as 0.8 per cent to end in the red. Photograph: Bloomberg

The German Dax gave up gains of as much as 0.8 per cent to end in the red. Photograph: Bloomberg

 

European shares fell on Friday as doubts over a post-Brexit trade deal and a stimulus package in the United States capped gains at the end of a solid week. With hours left to strike a deal, investors were left directionless.

DUBLIN

The Irish index of shares ended the session flat, closing the day at 7,423.99.

Bank shares dipped, with Bank of Ireland losing 0.85 per cent to close at €3.27, and AIB closing almost half a per cent lower at €1.68.

Ryanair advanced to €16.30, while shares in building group CRH rose to €34.75, a 2.36 per cent gain over Thursday’s closing price

Kerry Group climbed 2.2 per cent higher to €120.80. The company is said to be reviewing its ownership of Kerry Foods, which sells chilled meat and dairy products. Sources said the group could pursue a sale or spin-off of part or all of the business next year if it decides to proceed.

Hotel group Dalata saw shares dip 0.66 per cent to €3.76.

LONDON

British mid-caps eased on Friday from a 10-month high on profit-taking as the clock ticked down towards the end of Britain’s transition period for leaving the European Union with a trade deal still not secured.

The domestically focused FTSE 250, considered a barometer for Brexit sentiment, dropped about 0.9 per cent, but finished the last full week of the year up 2.5 per cent. Autos, real estate and banking stocks posted some of the steepest percentage losses.

The European Union said there were just hours left to strike a trade deal, while Britain called on the bloc to see sense as the two sides race to prevent a turbulent finale to the Brexit crisis at the end of the month.

Uncertainty over a post-Brexit deal pushed the exporter-heavy FTSE 100 down 0.3 per cent as US stocks dipped on a cooling fiscal stimulus-led rally.

In company news, Frankie and Benny’s owner the Restaurant Group shed about 6 per cent after it warned of a tough first quarter.

Fashion retailer Next dropped 2 per cent as a report said it was in talks with US investment firm Davidson Kempner Capital Management for a joint bid to gain control of Arcadia fashion group, which collapsed into administration last month.

EUROPE

The pan-European Stoxx 600 index broke a four-day rally to end 0.4 per cent lower, reversing gains that followed a surprise rise in German business morale in December.

The German Dax gave up gains of as much as 0.8 per cent to end in the red. The Ifo Institute’s upbeat data came even as Europe’s biggest economy went into a strict lockdown to contain a second wave of coronavirus infections.

The Stoxx 600 ended the week with a 1.5 per cent gain, its sixth week in the black in seven.

Travel and leisure stocks slipped on Friday, with British Airways owner IAG down 2.1 per cent after a media report that it had agreed to buy Spanish carrier Air Europa for €500 million.

In M&A moves, Dutch health technology firm Philips rose 1.7 per cent after it agreed to buy US cardiac diagnostics and monitoring firm BioTelemetry in a deal worth $2.8 billion.

NEW YORK

Wall Street retreated from record highs on Friday as a coronavirus stimulus deal remained in focus ahead of a weekend deadline, while Tesla shares hit a lifetime high in anticipation of their addition to the S&P 500 next week.

All the three major indexes hit a record high at the open, before retreating. Technology shares, which have led gains this week, were the biggest drag on the S&P 500, followed by financials and consumer discretionary sectors.

Still, all three major indexes were set for weekly gains, with the Nasdaq poised to outperform its peers with a 2.8 per cent gain.

Electric car maker Tesla rose 3.8 per cent, with massive trading volumes, as it is set to become the most valuable company to be ever added to Wall Street’s main benchmark index.

Microsoft shed 0.4 per cent after saying it found malicious software in its systems related to a massive hacking campaign disclosed by US officials this week.

FedEx fell 5.5 per cent after it did not give an earnings forecast for 2021, even as its quarterly profit almost doubled.

Rival United Parcel Service’s shares also declined 1.4 per cent. – Additional reporting: Reuters