European stocks little changed after rally

Ryanair drops 2.7 per cent, reflecting weakness in aviation stocks across Europe

There were mixed fortunes for Aer Lingus and Ryanair yesterday. Aer Lingus rose by 2.1 per cent to €1.43 on low volumes but Ryanair declined by 2.7 per cent to €6.346. Photograph: Rui Vieira/PA Wire

European stocks were little changed this week, following four weeks of gains, as euro- area economic growth missed estimates, and investors weighed equity valuations amid mixed earnings reports.

National benchmark indexes fell in 12 of the 18 western European markets during the week. Of the main markets, France’s CAC 40 dropped 0.5 per cent, Germany’s DAX added 0.5 percent, while the FTSE 100 gained 0.6 per cent.

The Iseq Overall index closed down 0.33 per cent yesterday at 4,654.09.

There were mixed fortunes for airline rivals Aer Lingus and Ryanair. Aer Lingus rose by 2.1 per cent to €1.43 on low volumes but Ryanair declined by 2.7 per cent to €6.346, reflecting weakness in aviation stocks across Europe.

After trading had closed, Ryanair confirmed that it has received a BBB+ rating from Fitch, which matches the rating recently awarded by Standard & Poor's.


This clears the way for the airline to access capital markets to source financing for its new 180 Boeing 737-800 aircraft deliveries, which commence in September 2014. The airline will publish its full-year results on Monday.

Bank of Ireland was one of the big movers of the day, rising by 3.6 per cent to 25.6 cent yesterday. The share has bobbed up and down over the past month and its rise yesterday came through in afternoon trading.

Industrial stocks were out of favour with Kingspan down 3.8 per cent and Smurfit Kappa closing 3.4 per cent lower.

The five most traded stocks in Dublin yesterday were Ryanair, Smurfit Kappa, Bank of Ireland, CRH and Kerry Group.

UK stocks gained, with the FTSE 100 Index rising for the week, as data showed gains in US housing outweighed a slide in consumer confidence in the world's largest economy.

Wm Morrison Supermarkets Plc rose 3.8 per cent, posting its biggest two-day gain since 2008, amid continued speculation that a US-led private-equity consortium may bid for the company.

AstraZeneca Plc rose for a fifth day as investors weighed prospects for a higher offer from Pfizer Inc. Intertek Group Plc dropped the most since January after saying the energy-infrastructure market in the first four months of 2014 was weaker than expected.

Banco Espirito Santo SA slumped 18 per cent after announcing a capital increase, and Banco Comercial Portugues SA lost 12 per cent after a report that it plans to do the same.

Mediaset SpA fell 14 per cent as the Italian broadcaster posted a loss for the first quarter and warned of weak advertising demand. Thomas Cook Group Plc slid 15 per cent after saying its UK customers opted for shorter and cheaper summer holidays.

Pandora A/S climbed 11 percent after the jewellery maker raised its full-year sales forecast. The Stoxx Europe 600 Index rose 0.1 per cent this week to 338.99. The measure reached its highest level since January 2008 on May 13th, sending valuations to their highest this year.

US stocks fluctuated in early trading, after the Standard and Poor's 500 Index fell the most in a month yesterday, as an unexpected drop in consumer confidence offset a rise in the pace of home construction.

Darden Restaurants Inc slid 4.3 per cent after agreeing to sell its Red Lobster chain for $2.1 billion.

Chesapeake Energy Corp sank the most in the SandP 500 after saying it will cut half its workforce. Nordstrom Inc jumped 13 per cent as the luxury department-store chain reported quarterly results that exceeded estimates.

Verizon Communications added 2.7 percent as Warren Buffett's Berkshire Hathaway Inc disclosed a stake.
– (Additional reporting by Bloomberg)

Ciarán Hancock

Ciarán Hancock

Ciarán Hancock is Business Editor of The Irish Times