European stocks pause after rally, while ECB stimulus boosts banks

A strong rally this week in European stocks stalled on Thursday as investors locked in profits, although euro zone banks surged after the European Central Bank ramped up its stimulus programme to prop up the coronavirus-hit economy.

DUBLIN

The Iseq rose 0.24 per cent on Thursday ,a day with little in the way of stock specific news.

Bank of Ireland was among the standout gainers, rising 2.94 per cent to close at €1.74. Rival AIB fell 0.35 per cent to €1.146.

Ryanair, which has had a strong run over the past two weeks, underperformed rivals but still closed up by 1.62 per cent on its Dublin listing at €12.84.

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Housebuilder Cairn Homes was one of the bigger losers on the day, falling 5.85 per cent to 91.8 cent. Another loser was paper and packaging group Smurfit Kappa, which declined 2.81 per cent to close at €29.06.

LONDON

The FTSE 100 closed down 0.6 per cent, while the mid-cap index fell 0.4 per cent.

Heavyweight HSBC and its banking peers were among the biggest drags on the FTSE 100 after the Bank of England said it would gather more information from lenders on their likely lending losses.

Asset manager Intermediate Capital Group dropped 7.6 per cent after its investment arm posted an annual loss as market fallout from the virus pushed valuations lower.

Commodity heavyweights such as BP and Rio Tinto fell in tandem with lower oil and metal prices.

Luxury car-maker Aston Martin fell more than 3 per cent after saying it would shed up to 500 jobs, and car dealership group Lookers recouped early losses to soar nearly 16 per cent after setting out plans to close 12 sites and lay off 1,500 employees.

EUROPE

The euro zone stock index closed 0.2 per cent lower after falling 0.8 per cent earlier in the session, but the bloc’s lenders gained 1.1 per cent after the ECB said it would increase the size of emergency bond-buying by a wider-than-expected €600 billion.

An index of Italian banks jumped 1.1 per cent, while Spanish lenders BBVA and Banco Santander gained nearly 1.7 per cent.

However, the pan-European Stoxx 600 fell 0.7 per cent, led by declines in automakers, utilities and healthcare stocks.

Germany's coalition parties agreed a €130 billion stimulus package to speed recovery on Wednesday, but shares in Daimler and Volkswagen fell between 1 per cent and 2.5 per cent as the measures favoured electric cars.

Shares of car-parts suppliers such as Continental and Valeo were down 2.9 per cent and 4 per cent.

Airbus jumped 5.2 per cent after a report said it was looking to hold underlying jet output at 40 per cent below pre-pandemic plans for two years, an approach which adds new pressure to cut thousands of jobs.

French spirits company Remy Cointreau surged 11.3 per cent after it predicted a strong recovery in the second half, driven by China and the US.

German sportswear company Adidas gained 1.8 per cent as it said sales had returned to growth in greater China faster than it had expected after the coronavirus lockdown.

NEW YORK

The S&P 500 and Nasdaq indexes edged lower in choppy trading on Thursday, as a rally fuelled by hopes of a post-coronavirus economic recovery fizzled out.

American Airlines Group jumped 24.5 per cent after the airline revealed plans to fly more than 55 per cent of its July 2019 domestic capacity and boost its US flight schedule next month.

Charles Schwab gained 1.5 per cent after it received an anti-trust approval from the department of justice for its purchase of TD Ameritrade. Shares of TD Ameritrade jumped 3.5 per cent.

EBay jumped 6.3 per cent after it raised its current-quarter revenue and profit forecast as people stuck at home ordered more from its platform due to the Covid-19 pandemic. – Additional reporting: Reuters