European stocks dip despite optimism on EU stimulus plan

European shares lost some ground on Tuesday after a rally in the previous session, as falls for euro zone banks and telecoms stocks countered optimism from a stimulus plan for the European Union.

Dublin

Dublin’s Iseq all-share index dropped 0.22 per cent on Tuesday although there were some strong gainers on the day.

Healthcare group Uniphar rose 12.54 per cent to €1.75, continuing to perform strongly after it was last week announced that the stock would be included in MSCI's Ireland index.

Elsewhere, Ryanair advanced 2.84 per cent to €10.06, mainly on the back of a strong update to the market on Monday.

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Results-driven moves were a feature of the market on Tuesday with Dublin-headquartered but London-listed DCC rising 2.27 per cent to £61.20 after it said its adjusted operating profit rose 7.3 per cent to £494.3 million for the 12 months to the end of March.

UDG Healthcare, meanwhile, rose 8.66 per cent to £6.77 after the Dublin-based company posted strong half-year results. The company is also listed in London.

It was a bad day for convenience food group Greencore, which reported a near 70 per cent collapse in demand for its food-to-go products on foot of the Covid-19 pandemic. The company, also based in London but headquartered in Dublin, fell 7.15 per cent to £1.40.

Finally, beleaguered baked goods group Aryzta saw its stock price continue to rise after activist investors last week upped their stake in the company. The Cuisine De France owner closed 14.73 per cent higher at €0.38 on the day.

London

The blue-chip FTSE 100 fell 0.8 per cent after earlier jumping more than 1 per cent.

Tobacco group Imperial Brands slid 6.5 per cent on plans to cut its dividend by a third while it also forecast a bigger hit from the Covid-19 crisis in the second half of the year.

The world's largest caterer Compass Group fell 3.4 per cent as it sought to raise £2 billion in a share sale to reduce debt and help it cope with the coronavirus crisis.

Insurer Beazley jumped 7.8 per cent as it raised £247 million in fresh capital.

Europe

After rising as much as 0.5 per cent at the open, the pan-European Stoxx 600 gradually shed gains to close 0.6 per cent lower.

Telecoms stocks led sectoral declines, as shares in Telecom Italia fell 8.6 per cent after Italy's biggest phone group gave no guidance on its 2020 core profit target as it reported a drop in first-quarter earnings.

Banking-heavy Spanish and Italian bourses led regional declines with a 2.5 per cent and 2.1 per cent fall respectively, with some analysts pointing to the lifting of short-selling ban across six EU states hitting shares of euro zone lenders.

Shares in Banco de Sabadell tumbled 11.9 per cent and Bankia dropped 11 per cent, while Italian lender Banco BPM fell 7.3 per cent. However, wealth manager Julius Baer rose 5 per cent as it saw a spike in trading volumes boost its first-quarter margins, even though a strong Swiss franc ate into assets under management.

New York

The S&P 500 was trading flat on Tuesday, handing back some gains from a strong rally in the previous session, as investors digested a mixed set of quarterly results from retailers including Home Depot and Walmart.

Home improvement chain Home Depot fell 1.4 per cent as it missed quarterly profit estimates due to higher costs, while department store operator Kohl's slumped 8.4 per cent after reporting a bigger-than-expected loss. Walmart gained 0.7 per cent after posting a jump in first-quarter US comparable sales as online sales soared due to stockpiling of essentials during the coronavirus-related lockdown.

Gains in technology focused companies including Apple, Amazon. com and Intel helped the Nasdaq stay in the positive territory.

– Additional reporting: Reuters