European stocks edge higher after last week’s fall

Irish shares fare better than wider European market, with Kingspan’s 7% rise leading way

Wall Street recovered earlier losses on Monday as gains in healthcare stocks offset a slide in the energy sector.  Photograph: Michael Nagle/Bloomberg

Wall Street recovered earlier losses on Monday as gains in healthcare stocks offset a slide in the energy sector. Photograph: Michael Nagle/Bloomberg

 

European stocks edged higher on Monday after falling the week before, as Swiss chemical company Syngenta gained after US regulators cleared a takeover bid for the company by ChemChina.

The STOXX 600 rose 0.1 per cent, stabilising after posting its biggest weekly drop since June on Friday. It gave back some of the gains, which had taken it to highest level since Britain voted in June to leave the EU.

DUBLIN

The Iseq index of Irish shares fared better than the wider European market, buoyed by Kingspan after the insulation panels maker reported interim profit and revenues that exceeded expectations. The company, whose stock was beaten down after the Brexit vote, surprised many analysts saying the event has not had any impact on its trading so far.

“This reflects a very strong underlying first half performance,” said Robert Eason, an analyst with Goodbody Stockbrokers, who said he was upgrading his earnings forecasts for the company for this year and next by 10 per cent.

Shares in Kingspan soared 7 per cent to €24.39, leaving them just 3 per cent off where they stood before the UK referendum.

Sector peer, Grafton Group rose 2.7 per cent in London.

Ryanair rose 0.9 per cent to €12.05, as Davy highlighted the company’s strengths relative to the wider European airlines sector, which has had a torrid time in the wake of Brexit and amid a spate of terrorism tacks in traditional holiday spots.

“We think Ryanair stands out as the most compelling investment case at current share price levels,” said Davy analyst Ross Harvey, adding that the stock stands out when looking at the company’s growth prospects and market valuation.

Dalata also inched 0.5 per cent to €4.17 as figures from STR, a research firm that tracks hotel figures, showed that revenue per available room in Dublin continue to grow at an annual pace of over 20 per cent in July.

Bucking the trend, banks were out of sorts, with Bank of Ireland falling 1.7 per cent to 17.8 cents, while Permanent TSB lost 2.1 per cent to €1.88.

While Tullow Oil advanced earlier in the session, as Bank of America Merrill Lynch adding the company to its so-called Europe 1 List of favoured stocks. However, it closed down almost 1 per cent to €2.67 as oil prices fell.

LONDON

UK stocks declined, following their worst week since before the Brexit referendum, as miners slid on a stronger dollar.

Fresnillo and Anglo American dropped at least 4 per cent each, leading miners lower as commodities decreased. Royal Dutch Shell and BP fell as crude oil prices dropped after Iraq sought to increase exports.

The FTSE100 Index slid 0.4 per cent to 6,828.54.

EUROPE

Syngenta, the Swiss producer of agrochemicals and seeds, rose up 10.6 per cent, the top STOXX Europe 600 riser, after the Committee on Foreign Investment in the US cleared ChemChina’s $43 billion bid for the company.

Shares of French call-centre operator Teleperformance, an investor favourite following the Brexit vote, rose 8.9 per cent, hitting a record high after agreeing to buy LanguageLine Solutions .

Among the stocks that fell, Swedish medical technology group Getinge dropped 3.9 per cent as its chief executive Alex Myers was fired just 17 months after taking the job.

Basic resources fell 1.6 per cent, making them the biggest sectoral faller, weighed down by a drop in mining stocks.

WALL STREET

Wall Street recovered earlier losses on Monday as gains in healthcare stocks offset a slide in the energy sector.

Pfizer’s $14 billion acquisition of cancer drug maker Medivation propped up biotech stocks. Medivation’s shares jumped nearly 20 per cent, giving the biggest boost to the Nasdaq.

With the earnings season coming to an end, investor focus will shift to Federal Reserve Chair Janet Yellen’s speech on Friday at the annual central bankers’ meeting in Jackson Hole, Wyoming to see whether the Fed is keen on raising interest rates in the coming months.

Traders have priced in an 18 per cent chance of a rate hike for September, up from 12 per cent odds seen late last week.

By lunchtime in New York, the Dow Jones industrial average was up 0.02 per cent, the S&P 500 was 0.02 per cent higher and the Nasdaq Composite had advanced 0.07 per cent.