European shares rebound on reports of possible Greek deal
Rise in the shares shows markets want euro zone to continue, says analyst
Up and away: Aer Lingus stock closed yesterday 1.5 per cent up at €2.43. Photograph: Alan Betson
European shares rebounded on Wednesday from a one-week low the day before, supported by the prospect of an accord between Greece and its creditors.
The FTSEurofirst 300 index of top European shares closed 1.3 per cent up at 1,622.96 points, a rebound that accelerated on reports of staff-level agreement between Greece and its creditors, traders said.
“It clearly shows that the markets have got a reaction on all these occasions as they’d like to see a deal, a continuation of the euro zone as a whole,” said IG analyst Chris Beauchamp. “But you shouldn’t really believe anything until the deal is officially on the table and the ink is dry. Until you reach that point, everything is just up in the air as it has been.”
Greek shares closed 3.6 per cent up. The market was also supported by a survey showing morale among German consumers improved heading into June, helped by a growing willingness to make purchases.
DUBLIN Aer Lingus shares rose but perhaps more modestly than expected in the wake of the Government announcing its backing for the IAG deal. The airline’s stock closed the day 1.5 per cent up at €2.43.
Rival Ryanair, which has a near 30 per cent stake in Aer Lingus, enjoyed an even bigger bounce, rising 3 per cent to hit €11.75, a new high for 2015. This came on the back on a 4 per cent rise in previous session, predicated on a 66 per cent jump in full-year profits to €867 million.
Agri-services group Origin Enterprises saw shares fall 1.5 per cent to €8.35 after posting positive third quarter revenue numbers and maintaining its full-year guidance. LONDON UK stocks rebounded, rallying the most in almost three weeks. Imperial Tobacco Group climbed 3.3 per cent after agreeing to buy Reynolds American’s Winston, Kool, Salem and Maverick.
Shares of British Airways’ parent IAG rose 3.2 per cent after it won backing from the Government here to proceed with its takeover.
CRH advanced 3.6 per cent, the most in the FTSE 100 Index. The FTSE 100 gained 1.2 per cent to 7,033.33 at the close of trading in London, erasing its Tuesday losses.
EUROPE Among other sharp movers, Italy’s biggest insurer, Generali, climbed 2.8 per cent. The company said it would pay cumulative dividends of more than €5 billion to the end of 2018.
Shares in Novozymes, the world’s largest maker of industrial enzymes, gained 3.9 per cent after UBS raised its stance on the stock to “buy” from “sell”.
Energy shares were also in demand, with the STOXX Europe 600 Oil and gas index rising 0.7 per cent.
NEW YORK US stocks rebounded from the worst drop in three weeks as Apple led technology shares higher, while optimism that Greece has made progress with creditors boosted European shares to a one-month high.
The Standard and Poor’s 500 Index climbed 0.9 per cent early on in New York, its best gain in two weeks. The Nasdaq Composite Index topped its closing record as Broadcom surged 15 per cent after Dow Jones reported the company was in reports to be bought.
Tiffany & Co jumped 12 per cent after posting quarterly profit that beat estimates. Michael Kors Holdings, meanwhile, tumbled 24 per cent after its 2016 earnings forecast was short of projections. – (Additional reporting: Reuters/Bloomberg)