European shares in retreat as Iseq outperforms its peers
Strong trading in Bank of Ireland, Ryanair and Smurfit Kappa lift Iseq higher
After hitting a series of record highs in a post-election rally, Wall Street has been trading in a tight range as investors look for more details on Donald Trump’s policies. Photograph: Stephen Yang/Reuters
Trading in European equities and the euro was choppy on Thursday after ECB president Mario Draghi reaffirmed interest rates would stay at current or lower levels for an extended period and that the European Central Bank was ready to increase or extend bond purchases if the outlook worsens. US shares slipped as investors remained cautious ahead of the inauguration of president-elect Donald Trump.
The Dublin market outperformed many of its peers with the Iseq index of leading shares closing up 38.52 points, to 6,580.10. Shares in Bank of Ireland traded strongly late in the day, with the stock closing up 4 per cent to €24.80.
Smurfit Kappa bounced back after a low close on Wednesday. Shares rose to almost 4 per cent at one stage, before ending the day 2 per cent higher at €24.10. Ryanair also gained, up 2.3 per cent to €14.92, while hotels group Dalata closed up 1 per cent at €4.39. Iseq heavyweight CRH was flat at €32.31. Green Reit was 1.5 per cent lower, at €1.29 while rival Hibernia Reit was down 0.8 per cent, to €1.19.
The FTSE 100 continued its slide as a stronger pound and disappointing Royal Mail earnings dragged on the index. London’s top tier fell 0.5 per cent or 39.17 points to close at 7,208.44, hit in part by a 0.5 per cent rise in sterling versus the dollar. Poor reception to earnings from Royal Mail and British Land dragged shares down 26.9 pence to 422.5 pence, and 22.5 pence to 595.5 pence, respectively.
Aviva shares dropped 2.4 pence to 476.3 pence after the life and pensions giant announced it was merging its UK insurance businesses as part of a shake-up that has sparked the departure of its European boss. Barratt Developments shares lost 11 pence to 505.5 pence as the firm unexpectedly announced that chief financial officer Neil Cooper would step down “by mutual agreement” with immediate effect, after just over a year in the job.
Moneysupermarket Group shares soared 24.1 pence to 327.1 pence as turnover rose 20 per cent in the fourth quarter. The company now expects a 12 per cent jump in full-year revenue to $316 million.
European stocks dipped, although Zodiac Aerospace’s shares surged after a takeover offer by France’s Safran. Zodiac Aerospace rocketed 22.8 per cent after Safran offered $9 billion to buy the aircraft seat manufacturer. After an initial positive reaction, shares in Safran turned lower to end down 5.4 per cent. Dutch-Belgian food retailer Koninklijke Ahold Delhaize was up 5.9 per cent after posting strong fourth-quarter sales figures. Shares in Italian eyewear maker Safilo fell 13.9 per cent after reports French luxury group LVMH would take a stake in rival spectacle manufacturer Marcolin.
Equity investors continue to hold their fire ahead of the presidential inauguration as they wait to see if Donald Trump will carry through on pro-business promises such as tax cuts, fiscal stimulus and lighter regulation that had sent stocks soaring after the election.
Exxon was off 1.5 per cent following a UBS downgrade to “sell”. Merck’s 0.9 per cent loss weighed the most on healthcare stocks. Railroad provider CSX jumped 17 per cent after a source said CP Rail chief executive Hunter Harrison, who steps down at the end of the month, is in advanced talks to team up with a former Pershing Square Capital partner to shake up CSX. – (Additional reporting: agencies)