European shares post worst quarter in two years despite M&A lift

Merger and acquisition activity gave European shares some relief on Thursday after a tech-led selloff across global markets earlier in the week, but the Stoxx 600 still posted its worst quarter in the last two years.

The Stoxx 600 ended the month on a positive note, up 0.44 points at 370.87 points, but closed the quarter down 4.7 per cent despite starting with a global equities rally in January.

DUBLIN

The Iseq closed slightly higher on Thursday despite a lacklustre day with little in the way of news to stir activity.

AIB was a big gainer again, closing up nearly 2 per cent to €4.89 following a pledge from Minister for Finance Pascal Donohoe earlier in the week to allow lenders to keep the ability to write off losses that occurred during the financial crisis against future taxes.

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Permanent TSB also advanced, ending the day up 1.4 per cent to €2.00, while Bank of Ireland nudged up to €7.11.

Airlines had a big bounce across Europe, but Ryanair underperformed, despite closing up 1.2 per cent to €16.01.

Insurer FBD which has been on a big run over the last few months, rebounding from €10 at the end of January to more than €12, was down 3.2 per cent on low volumes traded.

Other movers included Paddy Power, which outperformed other bookies to close up 1 per cent, and Hibernia Reit, which was up 0.7 per cent after it announced a new tenant for Windmill Lane.

LONDON

Melrose's successful bid for GKN helped the UK's top share index finish the month on a positive note on Thursday, and gave a mildly upbeat end to the FTSE 100's worst quarter since 2011. The blue-chip FTSE 100 was up 0.17 per cent on the day at 7,056.61 points as traders prepared for a market holiday.

GKN surged about 9 per cent in late trading after Melrose Industries announced it had narrowly clinched an £8 billion takeover of the British engineering firm after a three-month battle for control.

The FTSE 100 ended the first three months of 2018 with a loss of 8.2 per cent, its worst quarter since 2011 and making it the weakest-performing major European market so far this year. It was closely followed by Germany’s exporter-heavy DAX, which lost 6.3 per cent over the same period.

EUROPE

Car stocks led gains in Europe as Renault jumped 5.7 per cent to a more than 10-year high after Bloomberg reported the French firm was in talks to merge with Nissan. Hopes of deal-making spread to other stocks, driving them up too. Daimler, Peugeot, Porsche and Volkswagen rose 3.4 to 4.4 per cent.

Services group Sodexo sank 15.7 per cent after cutting its full-year sales and profit margin outlook, reporting a weaker than expected second quarter.

WALL STREET

US stocks jumped in early trading on Thursday as technology shares bounced back from a sharp selloff ahead of a long weekend that marks the end of a turbulent quarter for Wall Street.

Shares of Facebook, Apple, Alphabet and Microsoft were up between 1 per cent and 4 per cent, driving a 1.8 per cent gain in the S&P technology index.

However, the S&P 500 and the Dow were on track to log their worst quarter in more than two years on concerns over a global trade war and interest rate hikes, as well as a rout in technology stocks caused by Facebook’s data scandal.

Amazon fell more than 1 per cent after president Donald Trump blasted the company with a list of complaints, a day after news website Axios reported that Mr Trump wants to rein in the company's growing power using federal anti-trust laws. GameStop shares fell 10.8 per cent after the company provided disappointing full-year sales forecast. – Additional reporting: Reuters