European shares rise after better than expected economic data

Investor sentiment improves amid vaccine optimism

A festive toy bull decorates a trader’s desk monitor near the Dax index yield curve at the Frankfurt Stock Exchange. Photograph: Alex Kraus/Bloomberg

A festive toy bull decorates a trader’s desk monitor near the Dax index yield curve at the Frankfurt Stock Exchange. Photograph: Alex Kraus/Bloomberg

 

European shares closed higher on Wednesday after the publication of upbeat regional business activity data as well as rising hopes for a Brexit trade deal and the possible rollout of a Covid-19 vaccine on the continent before the new year.

Investor sentiment brightened after a European Commission official said the EU could give final approval for the Pfizer-BioNTech vaccine as early as December 23rd.

Meanwhile, flash purchasing managers’ indices (PMIs) for December showed the euro zone economy far exceeded expectations, with manufacturers reporting strong growth fuelled by rising exports and a booming performance from Germany.

DUBLIN

The Iseq closed up 0.8 per cent as sentiment turned positive across Europe. Irish financial stocks were in the green, with AIB up 4.3 per cent at €1.67 and Bank of Ireland closing 1.1 per cent higher at €3.20.

Ryanair advanced 2.5 per cent to €15.98, while building materials group CRH, the largest stock on the index, also had a good session, finishing up 1.7 per cent at €33.48.

However, pressure remained on building materials group Kingspan, which is one of the companies under examination at the inquiry into the Grenfell Tower tragedy. Its stock closed down 4 per cent at €65.75.

Dalata Hotel Group was another faller, slipping 1.9 per cent to €3.81, while packaging giant Smurfit Kappa finished 0.9 per cent lower at €38.12.

LONDON

The exporter-heavy FTSE 100 index weathered a higher pound to rise 0.9 per cent and break a three-session losing run, while the mid-caps on the FTSE 250 added 1.2 per cent.

Dixons Carphone soared 12.3 per cent after it posted strong earnings, with the electricals retailer profiting from a boost in online sales in Britain and Ireland.

Fashion retailer Superdry added 9.6 per cent after it said founder Julian Dunkerton would become its permanent chief executive following his return to the top job last year after a boardroom coup.

Lucky Strike-maker British American Tobacco (BAT) rose 0.8 per cent after it said it would begin human trials for its own Covid-19 vaccine, derived from tobacco leaves, after receiving regulatory approval.

EUROPE

Rallying for a third straight session, the pan-European Stoxx 600 index closed 0.8 per cent higher, having touched a near 10-month peak during the session.

While most sectors in Europe rose, banks slid 1.1 per cent, reversing some of the previous two sessions’ almost 3 per cent gain.

In Germany the Dax surged 1.5 per cent, posting its best session in three months, while the French Cac 40 nudged up 0.3 per cent. However, Spain’s lender-heavy Ibex ended in the red.

Auto stocks hit a near three-month high, with German tyre-maker Continental rising 2.9 per cent after it sharply raised its medium-term earnings forecast.

Biotech firm Galapagos skidded to the bottom of the Stoxx 600 after its partner for an experimental rheumatoid arthritis treatment, Gilead Sciences, decided not to pursue US approval for the drug.

Altice Europe topped the index with a 23.3 per cent jump after the French telecoms group’s founder increased an offer to take it private by 30 per cent.

US

Wall Street stocks were mixed as lawmakers attempted to agree on stimulus amid signs the economic recovery is faltering. Traders also awaited the Federal Reserve decision for guidance on its bond-buying plans.

The S&P 500 fluctuated as gains in technology and retail companies offset losses in utility and industrial shares. Earlier Wednesday, the benchmark gauge fell after disappointing retail-sales data. The Nasdaq 100 outperformed, while the Dow Jones Industrial Average retreated.

Boeing slipped 1.2 per cent in early trading. The aircraft manufacturer said it was scrapping most pay raises next year and giving out shares instead.

Amazon.com and Microsoft were the standout performers among tech companies, but electric vehicle maker Tesla was 1.8 per cent lower. – Additional reporting: Reuters/Bloomberg