European stocks hold steady on stimulus hopes

Markets report: Iseq nudged slightly upwards on a day of modest gains

Bank of Ireland dropped 0.3 per cent to €4.33.

Bank of Ireland dropped 0.3 per cent to €4.33.

 

European stocks held steady as weak business growth data sparked hopes of fresh monetary stimulus, while sentiment was buoyed by signs of progress in US-China trade talks.

The blue-chip FTSE 100 in London underperformed as sterling recovered ground, putting pressure on multinational exporters with earnings in other currencies.

DUBLIN

The Iseq nudged slightly upwards on a day of modest gains across Europe. Ryanair outperformed, adding 1.6 per cent to close at €10.57, after a flat session the day before. Packaging group Smurfit Kappa held onto its 5 per cent surge on Tuesday and added a further 0.5 per cent to finish at €30.10.

There were mixed fortunes for financial stocks, with AIB closing 2.4 per cent higher at €3.63, but Bank of Ireland dropping 0.3 per cent to €4.33. Cement-maker CRH, an index heavyweight, edged down less than 0.1 per cent to €29.45.

Dalata Hotel Group was a faller, ending 1.25 per cent lower at €4.75, and insulation company Kingspan was down 2.3 per cent at €46.50, but food group Kerry advanced 0.8 per cent to €107.90.

Irish exploration company Tullow Oil fell 0.4 per cent on its primary London listing on a day when it reported interim results that were in line with expectations, but revised down its full-year production forecast.

LONDON

Mining stocks dragged London’s main index to its worst day in two months as iron ore prices fell, while luxury carmaker Aston Martin lost a quarter of its value after cutting annual targets.

The FTSE 100 ended down 0.7 per cent, while the FTSE 250 mid-cap index added 0.2 per cent.

Brazilian miner Vale said it had been authorised to partially resume dry processing operations at its Vargem Grande complex in Brazil, which had a knock-on effect on iron ore prices. Rio Tinto was among the biggest fallers with a 4.6 per cent drop, while Anglo American and BHP were also lower, as Liberum analysts downgraded the iron ore majors.

Exporters also weighed on the index as sterling rose, having dropped on Tuesday after confirmation that Boris Johnson would be the UK’s next prime minister.

Broadcaster ITV jumped 6.6 per cent after it said a strong contribution to online revenue from reality show Love Island helped limit the decline in first-half advertising business.

Aston Martin plunged 25.9 per cent after it cut its 2019 volumes forecast, with sales to dealers in Europe down by almost a fifth in the first half.

EUROPE

Stocks rose, having fluctuated between gains and losses earlier in the session. In Frankfurt, the Dax posted a 0.3 per cent climb, while the French Cac 40 finished 0.2 per cent lower.

Investors were quick to dump financial shares, spooked by a bigger-than-forecast quarterly loss of €3.15 billion at Deutsche Bank, which sent its stock down 1.9 per cent on the day.

German carmaker Daimler closed 2 per cent higher despite a disappointing quarterly update in which it reduced the sales outlook for Mercedes-Benz cars. Its statement followed reports of more gloomy news in the sector, with Japanese company Nissan expected to cut 10,000 jobs.

US

A rally in Wall Street semiconductor stocks blunted the impact of weak earnings from bellwethers Boeing and Caterpillar.

Trade-sensitive Caterpillar dropped 4.1 per cent following disappointing earnings on weak sales in China, and higher production and restructuring costs. Boeing slipped 2 per cent after the world’s largest aircraft manufacturer posted its biggest loss in decades on the back of this year’s grounding of its best-selling 737 Max planes after two deadly crashes.

The bleak earnings dragged the blue-chip Dow index down more than 100 points in early trading, but the rise in chipmakers helped the S&P 500 and Nasdaq indexes to trade flat to slightly higher, as earnings season continues. – Additional reporting: Reuters / Bloomberg.