European shares rise amid hopes for Brexit deal breakthrough

Stoxx 600 benchmark index on course to end tumultuous 2020 down 5% despite recovery

Wall Street stocks were mostly higher in early trading on Wednesday, shrugging off US president Donald Trump’s sharp criticism of the stimulus package as the US reached agreement to boost its coronavirus vaccine supply. Photograph: Angela Weiss/AFP via Getty Images

Wall Street stocks were mostly higher in early trading on Wednesday, shrugging off US president Donald Trump’s sharp criticism of the stimulus package as the US reached agreement to boost its coronavirus vaccine supply. Photograph: Angela Weiss/AFP via Getty Images

 

European shares logged yet another day of strong gains on Wednesday, making up almost all of the losses at the start of the week, cheered by suggestions of an imminent Brexit trade deal.

DUBLIN

The Iseq closed up 1.7 per cent as rising optimism that a Brexit trade deal can be struck lifted stocks across Europe.

Ryanair gained 4.2 per cent to €16.25 amid hopes for a vaccine rollout as investors responded to the European Commission’s approval of the use of the Pfizer-BioNTech vaccine. Dalata Hotel Group added 3.3 per cent to €3.78.

Bank of Ireland added 4.4 per cent to €3.44, while AIB closed up 0.5 per cent at about €1.70, though there was a more modest nudge up for building materials group CRH, with the largest stock on the Dublin market rising 0.15 per cent to €34.53.

Paddy Power owner Flutter Entertainment was also among the gainers, swelling 5.25 per cent to €170.50. Insulation maker Kingspan dropped 2.45 per cent to €59.65, however, and was one of the few fallers on the day.

LONDON

The FTSE 100 reversed losses to pull into the black, but its 0.7 per cent gain on the day still lagged the performance of other European indices as the pound surged. Gains for sterling usually have a negative impact on the exporter-heavy blue-chip index.

The more domestically focused FTSE 250 gained 1.7 per cent, however, closing at a 10-month high. Further cheer came as France lifted its ban on UK travellers and freight.

In company news, pub operator Marston’s shares jumped 8 per cent after the company said it will operate Brains’ 156 pubs in Wales in a deal that will save 1,300 jobs.

Cairn Energy surged 23 per cent, topping gains on the FTSE 250, after winning an international arbitration case against the Indian government over a tax dispute.

EUROPE

The pan-European Stoxx 600 index hit session highs on the news and closed up 1.1 per cent in holiday-thinned trade. The index extended a recovery rally after a 2.3 per cent slump on Monday when a mutant variant of coronavirus was detected in the UK, sending markets into a tizzy.

Germany’s Dax jumped 1.3 per cent in its last trading day of the week, capping weekly losses at 0.3 per cent, while in France the Cac 40 added 1.1 per cent. Spanish and Italian stocks also made gains.

Daimler was among the biggest boosts to the Stoxx 600, up 3.3 per cent after business newspaper Handelsblatt reported that the German carmaker is preparing a stock market listing of its trucks division.

The travel and leisure sector gained the most on the day, followed by banks, while oil and gas stocks tracked a rise in crude prices.

The Stoxx 600 is on course to end a tumultuous 2020 down about 5 per cent, despite a stunning recovery from the coronavirus-fuelled lows hit earlier in the year on ultra-easy monetary policy and vaccine optimism.

NEW YORK

The S&P 500 and the Dow rose in early trading on Wednesday, while the Nasdaq lagged as investors shifted out of technology and into cheaper sectors that are poised to benefit from an eventual economic recovery.

Ten of the 11 major S&P sectors were higher, with energy stocks rising the most as investors clung to hopes of a sooner-than-expected economic recovery on the back of easy monetary policy, high liquidity and vaccinations.

Technology stocks including Microsoft, Paypal and Amazon. com, which have consistently outperformed during the pandemic, dragged the Nasdaq lower.

Pfizer rose 2.3 per cent after a deal to supply the US with 100 million additional doses of its Covid-19 vaccine by July, while Merck added 0.9 per cent following its own Covid-19 treatment agreement.

– Additional reporting: Reuters