European stocks close slightly up but mark worst week since 2008
Stocks pare most gains after Spain declares state of emergency
Traders work during the opening bell at the New York Stock Exchange on Friday. Photograph: Johannes Eisele/AFP
European stocks snapped a six-day losing streak on Friday, but made only a small gain over the course of the day as an initial rebound ran out of steam. The region’s stocks, which were earlier set for their best day since late-2008, swiftly pared gains after Spain declared a state of emergency over the outbreak, while reports that the United States would follow suit – which it did – added to the pain.
The benchmark Stoxx 600 index closed up 1 per cent, following a record 11.5 per cent crash on Thursday. The index was down 18 per cent for the week, its worst weekly drop since the 2008 financial crisis.
The Dublin market closed up 0.4 per cent after a four-day sell-off on foot of the coronavirus outbreak. “Whatever we made up in the morning, we just gave it all back, with people de-risking ahead of the weekend,” Davy analyst Geoff McAvoy said. He said there was no real buying behind the early rally, it was more of “a sellers’ strike” driven by German and European Central Bank (ECB) moves to provide more stimulus.
PaddyPower Betfair owner Flutter fell nearly 7 per cent to €71.54 as football chiefs decided to suspend Premier League and other top-level fixtures until April 3rd, which is likely to result in a slump in betting revenue. Global building materials group CRH closed marginally down at €23.03 having been up quite substantially earlier in the session. Homebuilders Cairn and Glenveagh capped off an awful week, closing down 8.7 per cent and 7 per cent.
Bank of Ireland was marginally up, tracking trends in financial stocks elsewhere, while AIB closed down.
London’s top 100 companies saw earlier gains pared back as the market eked out sluggish growth at the end of what proved to be the third worst week in the index’s history. The FTSE 100 closed the day up 128.63 to 5,366.11, a 2.5 per cent rise on the day. Traders may be able to take heart from the index’s growth a day after it lost nearly 11 per cent of its value in a bruising session.
However, there will be questions raised after the FTSE handed back a rise of almost 8.8 per cent that it had reached at around midday on Friday. Shares in British Airways and Aer Lingus parent IAG traded up 8 per cent to 355.8 pence in the hour after BA’s chief executive Alex Cruz’s warning over jobs, paring gains of as much as 14 per cent earlier in the session. IAG’s stock price has fallen by 42 per cent in the last month.
Spanish stocks ended higher for the day as the bank-heavy Ibex was supported by higher euro-zone bond yields. The index bounced back from a near eight-year low. Italian stocks, which have been among the hardest hit as the country has been the worst-affected in Europe by the coronavirus outbreak, closed up 7 per cent, recovering from a more than seven-year low. Among the euro-zone subsectors, resource stocks were the best performers for the day, bouncing back from a four-year low. Mining heavyweights Evraz and BHP Group gained more than 12 per cent each. Swiss diagnostics maker Roche rose 3.2 per cent after the US Food and Drug Administration issued emergency authorisation for a faster coronavirus test made by the company. Oil and gas stocks were the worst weekly performers. They fell almost 30 per cent in their worst week ever in the wake of the oil price crash.
A rebound on Wall Street on Friday fizzled out following reports that president Donald Trump was set to declare a national emergency to tackle the rapidly spreading coronavirus outbreak, but later re-ignited as he spoke, soaring by 9 per cent. Wall Street’s fear gauge jumped to its highest since the 2008 financial crisis after logging its biggest-ever one-day surge in history on Thursday. Travel stocks, hammered in the rout, led gains, with the S&P 1500 airlines index up 1.2 per cent. Hotel operators Marriott International, Hilton Worldwide Holdings and Hyatt Hotels Corp advanced between 2.1 per cent and 4.3 per cent. – Additional reporting: Reuters