European shares gain as German migration row settles

Iseq underperforms European markets, up 0.35 per cent on the day

German chancellor Angela Merkel (R) at the beginning of a coalition summit at the Chancellery in Berlin.

German chancellor Angela Merkel (R) at the beginning of a coalition summit at the Chancellery in Berlin.

 

European shares gained on Tuesday after German chancellor Angela Merkel’s conservatives settled a row over migration and eased some anxieties of investors, though worries about trade wars remained.

Irish stocks underperformed wider European markets with Britain’s FTSE climbing following a shaky start to the month.

In the US, stocks rose on Tuesday boosted by energy stocks in advance of market closure as part of the July 4th holiday.

DUBLIN

Ireland’s benchmark stock exchange underperformed European markets on the second day of the trading week, rising 0.35 per cent.

Budget airline Ryanair was flat on the day as peers rose after some of its pilots threatened strike action due to take place next Thursday.

Although there was an initial dip in the stock, the reaction was ultimately quite muted and it closed at €15.50, unchanged on the day.

In volume terms cider maker C&C was busy on the day with over 11.5 million shares traded. The company closed at the top of the Iseq 20 index, up 1.56 per cent to €3.25. There was no stock specific news on the day, rather a particularly large seller in the market.

Iseq heavyweight CRH closed in line with markets, up 0.67 per cent to €30.20 while Green Reit outperformed Irish peers up €1.35 per cent to €1.50.

On the lower end of the Iseq, baker Aryzta reached yet another record low, down 7.06 per cent to €12.50 with no particular news in the market.

Glenveagh Properties, also heavily traded on Tuesday, dropped 0.26 per cent to €1.167.

LONDON

The blue-chip FTSE 100 index was up 0.6 per cent at its close, making back some of Monday’s loss when concerns over global trade hit risky assets.

Shares in big defensive companies topped the index, with telco BT, British American Tobacco and utility Severn Trent all up more than 2 per cent.

Shares in Aer Lingus owner IAG also rose 1.5 per cent on the back of a supportive research note from Credit Suisse in which analysts raised their price target for the company, saying that they expect efficiency gains to drive up margins.

Miners, however, were a weak spot as Glencore dropped more than 8 per cent and hit a one-year low. The miner said that a subsidiary had received a US Department of Justice subpoena on compliance with money-laundering laws.

EUROPE

The pan-European Stoxx 600 was up 0.8 per cent by its close, with Germany’s DAX rising 0.9 per cent.

The dispute over migration had threatened to topple Merkel’s fragile governing coalition, but in a breakthrough late on Monday evening her rebellious interior minister dropped his threat to resign after five hours of talks. Equity markets have been jittery ahead of a July 6th deadline when the US is set to slap tariffs on $34 billion worth of Chinese goods that Beijing has vowed to match with tariffs on US products.

One big faller in equities was BE Semiconductor, the Dutch equipment maker, which lost nearly 9 per cent after cutting its revenue forecast.

Societe Generale rose 0.6 per cent and Commerzbank was up 0.6 per cent after the latter agreed to sell its equity markets and commodities business (EMC) to the French bank.

NEW YORK

Facebook dropped 1.9 per cent after the Washington Post reported a federal investigation on the data breach linked to Cambridge Analytica was broadened and will include more government agencies.

Energy stocks held on to their gains even though crude oil prices reversed course shortly after the market opened as traders booked profits.

Shares of American Airlines, United Continental and Delta Air Lines fell between 1.2 and 2.2 per cent after Deutsche Bank downgraded all three stocks saying the growing US-China trade dispute could weigh on their results.

Tesla fell 5.1 per cent, declining for the second straight session on questions over whether it could sustain the pace of making its Model 3 cars. – Additional reporting: Reuters