European stocks climb after oil prices hit two-year highs

European stocks rose on Wednesday, led by a surge in energy shares as oil prices hit two-year highs, while strong regional earnings reports and signs of speedy economic recovery offset concerns about a rapid rise in US prices.

Dublin

The Iseq failed to join in the positive mood, declining 0.6 per cent, amid decline for some key stocks. Paddy Power owner Flutter Entertainment fell 4 per cent to €149.20 after it said the exit of Matt King, chief executive of its subsidiary FanDuel, would delay the potential US listing of the unit.

Ryanair fell 0.7 per cent to €16.64 and Dalata Hotel Group finished 2.6 per cent lower at €4.19. Glenveagh Properties dropped 1.6 per cent to about 99 cent, and Cairn Homes was down 2.2 per cent at €1.06.

Bank of Ireland rose 1.1 per cent to €5.22, but AIB fell 0.6 per cent to just below €2.54. Building materials group CRH, the largest stock on the index, added 0.4 per cent to €41.37.

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FBD added 0.75 per cent to €8.10 after it said it remained “confident” about its underlying profitability, future growth prospects and capital strength.

Ferry operator Irish Continental Group rose 1.3 per cent to €4.54 after it signalled an improvement in its freight volumes, although ferries revenue dropped 9.4 per cent in the first four months of the year.

London

The FTSE 100 rebounded, supported by positive earnings updates from companies including Diageo, while stronger than expected monthly GDP data bolstered optimism about a sharp recovery from the pandemic-driven slump.

The blue-chip index rose 0.8 per cent after slumping 2.6 per cent in the previous session, while the domestically focused mid-cap FTSE 250 index slipped 0.3 per cent.

Shares of oil giants Royal Dutch Shell and BP rose 3 per cent and 3.5 per cent respectively.

Spirits maker and Guinness owner Diageo climbed 3.4 per cent after it forecast organic operating profit growth of at least 14 per cent in its current fiscal year and restarted its capital return programme.

Spirax-Sarco Engineering gained 1.9 per cent as JP Morgan raised its price target on the stock after an upbeat trading update from the valve maker.

UDG Healthcare jumped 20.7 per cent after private equity firm Clayton, Dubilier & Rice (CDR) agreed to buy the Dublin-headquartered pharmaceuticals services company.

However, London-listed shares of Just Eat Takeaway.com plunged 8.3 per cent to the bottom of the FTSE 100 index after rival food delivery firm Delivery Hero announced a launch of operations in Berlin.

Europe

The pan-European Stoxx 600 index rose 0.3 per cent after falling almost 2 per cent on Tuesday. The European oil and gas index jumped 2 per cent.

German lender Commerzbank jumped 8.6 per cent after it beat expectations for first-quarter profit and raised its revenue outlook.

Amsterdam-based technology investor Prosus gained 2.1 per cent buoyed by plans to acquire up to 45.4 per cent of shares in its parent Naspers.

French video games company Ubisoft fell 11.1 per cent after it warned that operating profit might fall this financial year.

US

Wall Street stocks slumped after data showed consumer prices unexpectedly rose by the most in nearly 12 years in April, prompting bets on earlier interest rate hikes. Moments after data showed the US consumer price index jumped 0.8 per cent last month, the dollar spiked, and then extended its gains as expectations of rising real interest rates lifted the currency.

The Dow Jones shed 1.3 per cent, the S&P 500 dropped 1.5 per cent and the Nasdaq lost 2.3 per cent in early trading.

Tech stocks were among the key decliners. By 6.30pm Irish time, Microsoft was almost 3 per cent lower, while Alphabet was 2.9 per cent down. Both Apple and Amazon. com were trading about 2.5 per cent in the red.

– Additional reporting: Reuters