European shares gain on surprise rise in China’s exports

Iseq all-share index in Dublin outperforms peers, closing more than 2% higher

Housebuilder Glenveagh Properties was among the top performers on the Iseq index, advancing 8.6 per cent to 60 cent. Photograph: Dara Mac Dónaill

Housebuilder Glenveagh Properties was among the top performers on the Iseq index, advancing 8.6 per cent to 60 cent. Photograph: Dara Mac Dónaill

 

European shares closed higher on Thursday as a surprise rise in China’s exports suggested some resilience in global demand, while a batch of mostly strong earnings also provided cheer.

Dublin

In Dublin, the Iseq all-share index closed 2.17 per cent higher on the day, helped by stocks to which it gives a heavier weighting including Flutter Entertainment and CRH.

But it was housebuilder Glenveagh Properties that was among the top performers, advancing 8.6 per cent to 60 cent. The company issued a positive trading update on Thursday morning, noting that it had sold 95 new homes between February 26th and May 6th.

Paddy Power-owner Flutter Entertainment rose 4.08 per cent to €110.85 in the same week it completed its merger with Canadian rival the Stars Group. Moody’s issued a note saying that the company would grow “at least” as fast as the market following the deal.

As global economies set out a path to lifting lockdown restrictions, companies with exposure to construction are benefiting. Building materials giant CRH gained 2.05 per cent on the day to close at €26.88 while insulation group Kingspan rose 4.78 per cent to €48.68

Among losers were AIB, which dropped 1.88 per cent to €0.993 and Dalata Hotel Group, which closed 1.54 per cent lower at €2.55.

London

The blue-chip FTSE 100 rose 1.4 per cent by the close to wrap up a second consecutive week of gains. The domestically-oriented mid-cap index rose 1.7 per cent.

In company news, Britain’s biggest telecoms group BT tumbled 8.1 per cent after it suspended its dividend and pulled guidance for 2020, citing the pandemic.

Its shares also took a hit as US company Liberty Global and Spain’s Telefonica agreed to merge their British businesses in a $38 billion deal to challenge market leader BT.

HSBC, Barclays, Lloyds Banking Group and Royal Bank of Scotland gained between 2.7 per cent and 5.4 per cent after a Bank of England “desktop” stress test showed that leading banks are sufficiently robust to keep lending despite the economic fallout from the pandemic.

Insurer RSA jumped 6.6 per cent after it estimated its exposure to the outbreak at only £25 million and said that most of its business-interruption policies did not provide cover for coronavirus-related claims.

Europe

The pan-European Stoxx 600 ended up 1.1 per cent, led by gains in retail, basic resources and financial services.

ArcelorMittal, the world’s largest steelmaker, jumped 6.8 per cent after its first-quarter profit beat expectations. Still, the French company flagged much weaker profits in the medium term due to the coronavirus.

German online fashion retailer Zalando rose 11.5 per cent, leading gains in the retail sector, after it said sales were recovering from an initial hit from coronavirus lockdowns, and despite a first-quarter loss.

Some disappointing earnings forecasts also cast a shadow, with Air France dipping more than 3 per cent as it predicted operating losses would widen “significantly” in the April-June quarter, with 95 per cent of flights expected to remain grounded.

Aer Lingus owner IAG fell about 3 per cent after it warned that passenger demand would not return to previous levels until 2023, and it would seek to defer deliveries of 68 aircraft.

Spanish telecoms company Telefonica fell after it withdrew its 2020 financial guidance and reported a sharp fall in first-quarter net profit.

New York

Payments processor PayPal rose 13.3 per cent, providing the biggest boost to the S&P 500 after it forecast a strong recovery in payments volumes in the second quarter as social-distancing drives more people to shop online. Its shares helped the technology index rise 1.7 per cent, while larger peer Visa gained 3.2 per cent.

Lyft surged 23.1 per cent as the ride-hailing company posted higher-than-expected revenue and vowed to further cut costs to be profitable. Rival Uber gained 7 per cent. – Additional reporting: Reuters