European stocks eke out gains as airlines struggle

Iseq closes down as banking stocks are mixed

Porsche jumped 8.9% on contagion from a buying frenzy that has been lifting Volkswagen shares. Photograph: Getty

Porsche jumped 8.9% on contagion from a buying frenzy that has been lifting Volkswagen shares. Photograph: Getty

 

European stocks eked out gains by the closing bell on Monday after car makers resumed their rally, while airline and travel stocks dragged on markets amid fears that international travel would be heavily restricted this summer and worries lingered about more restrictions due to rising coronavirus cases on the continent.

DUBLIN

The Irish index of shares was lower on Monday, finishing the day at 7951, just over 0.5 per cent off.

Shares in Ryanair fell almost 3 per cent amid ongoing uncertainty around a recovery in the tourism industry. Hotel group Dalata saw its stock decline by 2.8 per cent over the day, while shares in travel software group Datalex lost 5.7 per cent to end the session at €0.479.

Banking stocks were mixed, with Bank of Ireland up 0.2 per cent at €4.106, and AIB down 1.56 per cent at €2.148 by the end of the day.

Heavyweight CRH was down 2.09 per cent to €37.47.

Glanbia was 1.2 per cent higher at €12.34, while Smurfit Kappa rose to €40.10, a 1.57 per cent rise.

LONDON

London’s Ftse 100 index ended higher on Monday on a weaker pound and as gains in defensive stocks outweighed declines in commodity-linked and travel shares, while drug maker AstraZeneca jumped on upbeat US trial results.

The Ftse 100 index recouped its early losses and ended 0.3 per cent higher, with consumer staples stocks, including Unilever, Reckitt Benckiser, British American Tobacco and Diageo gaining 0.3-2.5 per cent, on the weaker pound.

Healthcare stocks were also among the biggest gainers, with AstraZeneca up 3.3 per cent after the drug maker’s Covid-19 vaccine was found 79 per cent effective in a large US trial at preventing symptomatic illness, and was 100 per cent effective against severe or critical disease and hospitalisation.

Meanwhile, travel and leisure stocks were among the top fallers. British Airways owner IAG, down 5.2 per cent, was the biggest faller in the index after social care minister Helen Whately warned that Britons should wait before booking summer holidays abroad, pointing out that there were rising Covid-19 infection rates in Europe.

The Ftse 100 has rebounded nearly 37 per cent from a coronavirus-driven crash last year on vaccine-led optimism, but has struggled to reach pre-pandemic highs as commodity prices, lockdown measures and rising US bond yields weigh.

Oil heavyweights BP and Royal Dutch Shell also weighed on the index.

EUROPE

The pan-European Stoxx 600 rose 0.2 per cent, reversing declines from earlier in the session, with car stocks rising for a fifth day in the past six sessions.

Porsche jumped 8.9 per cent on contagion from a buying frenzy that has been lifting Volkswagen shares after the German car maker unveiled plans to challenge Tesla in the electric vehicle market. Deutsche Bank raised its target prices on Porsche, which holds the majority of Volkswagen ordinary shares, following a target rise for VW.

Euro zone banks exposed to Turkey, such as Spain’s BBVA, Italy’s UniCredit, France’s BNP Paribas and Dutch bank ING, fell 0.8-7 per cent after president Tayyip Erdogan replaced a hawkish central bank governor with a critic of high interest rates over the weekend.

However, the mood had improved by the end of the day. European stocks had seen sharp falls on Friday, easing from a one-year peak as renewed lockdowns in France and concerns over the pace of vaccination drives hit sentiment, with the European Union threatening to block exports of Covid-19 vaccines to Britain.

Lufthansa and travel company TUI fell. The wider travel and leisure sector fell 0.7 per cent, with Germany set to extend a lockdown to contain the Covid-19 pandemic into its fifth month.

NEW YORK

US stocks rose on Monday as technology stocks rebounded from a recent pullback that was sparked by a surge in bond yields, while Tesla jumped as a fund run by an influential investor said the electric-car maker’s shares could hit $3,000 in three years.

Tesla’s 5.5 per cent jump to $690 provided the biggest boost to the S&P 500 and Nasdaq. Ark Invest, founded by star stock picker Cathie Wood, has been extremely bullish about the company, in which it is one of the major investors.

A sharp run-up in Treasury yields since mid-February has dictated the course of equities trading, while weighing on high-flying tech-focused stocks.

The Nasdaq climbed about 0.8 per cent to start the week as the benchmark 10-year Treasury yield dipped to 1.688 per cent from a near 14-month high. The index is still down more than 6 per cent from its February 12th record close.

The S&P 500 and the Dow, however, clinched all-time highs as early as last week on bets that stimulus and vaccine rollouts would lead to a strong rebound in the US economy.

Kansas City Southern jumped about 13 per cent after Canadian Pacific Railway Ltd agreed to acquire the railroad operator in a $25 billion (€21 billion) cash-and-stock deal to create the first railway spanning the United States, Mexico and Canada.

At 11.51am EDT the Dow Jones Industrial Average rose 60.07 points, or 0.18 per cent, to 32,688.04, the S&P 500 gained 26.45 points, or 0.68 per cent, to 3,939.55 and the Nasdaq Composite gained 171.73 points, or 1.30 per cent, to 13,386.97.

Bank stocks, which have enjoyed a rally on brightening economic prospects, dropped about 1 per cent. The S&P 500 tech index jumped about 2 per cent, while materials, industrials, energy and financials were in the red.