European stocks end near record highs as tech rallies

European Central Bank set to slow emergency purchases

Traders return to the trading floor of the open outcry pit at the London Metal Exchange  in London for the first time since the Covid-19 shutdown. Photograph: Jason Alden/Bloomberg

Traders return to the trading floor of the open outcry pit at the London Metal Exchange in London for the first time since the Covid-19 shutdown. Photograph: Jason Alden/Bloomberg

 

European shares climbed on Monday to end near record levels, led by technology stocks that surged to their highest this year as a surprise rise in German factory orders pointed to improving global demand and boosted sentiment. The pan-European Stoxx 600 index rose 0.7 per cent to 475.19, just below its all-time high of 476.16.

But trading volumes were muted due to the Labour Day public holiday in the United States.

DUBLIN

In thin company news, Ryanair rose almost 2 per cent to €16.32 as the company said it had ended talks with Boeing on a major new order for Boeing 737 jets due to a disagreement over pricing.

Ryanair fired a shot across Boeing’s bow by ditching plans to add the Max 10 to its stable because it said the price wasn’t right,” said AJ Bell financial analyst Danni Hewson. “The budget airline’s colourful chief executive poured a little salt into the wound with canny comments about other airlines plumping for Airbus in recent weeks,” she added.

“Ten months of talks couldn’t secure a deal, and leaving the field while complimenting a rival’s colours might be seen by some as an interesting tactic ahead of the next round.”

AIB fell 1.3 per cent to €2.47 while rival Bank of Ireland rose marginally to €5.28. This followed the release of a report that listed Ireland among 17 territories used as a tax haven by big European banks that are shifting their profits around the world to minimise their tax bills.

Food group Kerry continued its march, rising 0.8 per cent to €125.30.

LONDON

London’s Ftse 100 rose on Monday, led by financial and industrials stocks, on bets that central banks would keep monetary policy loose amid signs of a sharp slowdown in the global economic rebound. The export-heavy Ftse 100 closed the session up 0.7 per cent, with personal goods and industrial services stocks jumping 1.9 per cent and 1.7 per cent, respectively.

The Ftse 100 had ended last week essentially flat as macroeconomic data suggested Britain’s recovery from the pandemic lost more momentum in August, a trend that was mirrored across the Atlantic with a dismal US jobs report.

The more domestically focused mid-cap Ftse 250 underperformed regional peers as data showed new car registrations in Britain fell 22 per cent year on year in August. Energy stocks were also weighed down by a slip in oil prices.

EUROPE

Investors are focusing on the European Central Bank meeting this week as some of its hawkish policymakers are calling for it to start paring back bond purchases with inflation surging and resilient growth in the euro zone. Last week Bank of America Securities upgraded its euro zone growth and inflation forecasts, predicting the bloc’s economy would expand 4.8 per cent this year, up from its previous forecast of 4.2 per cent.

Media and retail stocks were among the best-performing European sectors for the day. Italian defence group Leonardo gained 2.3 per cent after its chief executive officer said the company still aimed to list its US unit DRS when the right market conditions are in place.

French supermarket group Carrefour rose 1.9 per cent on news that France could ease health pass restrictions that are hurting the activity of large shopping centres. French engineering group Spie fell 4.3 per cent after it confirmed it had submitted a non-binding offer to buy Equans, the newly created services unit of French energy group Engie.

NEW YORK

Nasdaq futures inched up 0.4 per cent, while S&P 500 futures were up 0.3 per cent. Investors were still assessing the fallout from the September payrolls report, which showed a much smaller increase in jobs than expected, but also a pick-up in wages. The latter was enough to nudge longer-dated treasury yields higher and steepen the yield curve, even as markets speculated over whether the Federal Reserve might not start tapering until later than previously thought. “Employment decelerated sharply in August, with little indication of a pick-up in labour supply,” said Barclays economist Jonathan Millar. “This puts the Fed in a quandary as it balances risks of a sharp demand slowdown against those of tight supply and inflation.”