European shares retreat from record highs

European stocks retreated slightly from record highs on Monday, as a weaker open on Wall Street and rallying currencies offset optimism about a solid start to the earnings season.

After marking its seventh straight week of gains on Friday, the pan-European Stoxx 600 index closed little changed but fell about 0.3 per cent from all-time highs hit earlier on Monday.

The auto and parts sector led losses, down 1.6 per cent after a 2 per cent surge in the previous session, followed by the technology sector. The German Dax slid from fresh highs to post its worst day in a month.

A worrying resurgence in Covid-19 cases globally also weighed on sentiment.

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DUBLIN

After a strong end to last week on foot of the news that KBC Bank was to exit the Irish market, the two main Irish banks were either down or flat on the day. AIB was down nearly 1 per cent at €2.31 while Bank of Ireland was flat at €4.37.

Permanent TSB, the other Irish banking force, rose 5 per cent to €1.19. Kingspan was one of the main climbers, rising a further 3 per cent to €76.78. The company said on Monday that sales rose sharply in the first three months of the year as the company reported strong growth across its main markets.

The group, which manufactures high-performance insulation and building envelopes, said sales rose 24 per cent in the three months to March 31st to €1.28 billion. The company also has a major foothold in the US market and will benefit from the US government's $1.9 trillion Covid rescue and green spending plan. Ryanair, which has been strong of late, rose marginally to €16.07. The airline is set to take delivery of its first Boeing 737 MAX airliner following two years of delay caused by the grounding of the jet in the wake of two fatal crashes.

Amid the furore over the European Super League, Paddy Power Betfair owner Flutter fell 2 per cent to €176.70.

LONDON

London's Ftse 100 ended lower on Monday, dragged down by a stronger pound and as weaker oil prices weighed on energy firms, with Melrose the worst performer on the index after it decided to sell its air management unit. The British engineer dropped 5.5 per cent after it agreed to sell its Nortek Air Management business for about £2.62 billion and plans to use the proceeds to pay down debt, reduce a UK pension deficit and return cash to shareholders. The blue-chip index closed 0.5 per cent lower as the pound rose 1 per cent to hit a one-month high against the dollar, while heavyweight energy shares ended 1.23 per cent lower and were the top losers.

Home builders dropped 0.4 per cent even after property website Rightmove said advertised prices for homes in Britain hit a record high after finance minister Rishi Sunak stoked the market again by extending a tax cut for home-buyers last month.

EUROPE

Among results, Faurecia forecast robust current-quarter sales growth on Monday, after surging sales in China helped the French car parts maker beat market expectations in the first three months of the year. First-quarter earnings for companies listed on the Stoxx 600 are expected to jump more than 55 per cent after a near 40 per cent slide in the year-earlier quarter, according to Refinitiv IBES data. Italy's Juventus surged 18 per cent after top European football clubs, including Juventus and Manchester United, announced a breakaway competition to rival the Uefa Champions League.

Danske Bank slipped 2.4 per cent as chief executive Chris Vogelzang resigned after Dutch authorities named him as a suspect in a probe into violations of money-laundering regulations at lender ABN Amro. ABN Amro rose 2.3 per cent after it said it had reached a €480 million settlement with prosecutors over money-laundering allegations.

NEW YORK

Major US stock indexes fell from record levels on Monday as investors sought cues from first-quarter earnings reports to justify the rich valuation of equities, while Tesla shares fell following a fatal car crash. The electric-car maker was down 3.5 per cent after a Tesla vehicle, which was believed to be operating without anyone in the driver's seat, crashed into a tree on Saturday night north of Houston, killing two occupants.

The stock, which was the biggest drag on the S&P 500 and the Nasdaq, was also under pressure due to a sharp drop in bitcoin over the weekend. Coca-Cola rose 1 per cent after the beverage maker trounced estimates for quarterly profit and revenue, benefiting from the easing of pandemic curbs and wide vaccine rollouts. IBM, another blue-chip company, slipped about 0.2 per cent ahead of its results after market close.

"The market has had a huge jump to the upside so it needs to take a little bit of rest," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "For now it's just a little bit of profit taking as traders await results from big tech names on Wall Street."