European stocks record biggest one-day gain in two years

Banks and travel shares rally as investors pause sell-off and oil prices edge down

European stock markets surged by the most in a single session for two years on Wednesday as investors pressed pause on a sell-off, while oil prices edged back down from their latest peak.

Hard-hit banks, automotive manufacturers and travel and leisure stocks rose more than 7 per cent each as news that Russia and Ukraine expressed willingness to hold peace talks helped sentiment and boosted recovery in stocks globally.

Dublin

The Iseq index soared 6.5 per cent, replicating the pattern of strong gains across European markets.

Building materials group CRH, which has been affected by its exposure to the Ukraine market, jumped 7.3 per cent to €37.60, while there was a 9 per cent gain for Ryanair as travel stocks rallied, with the airline's Dublin share price closing at €13.26. Dalata Hotel Group leaped 11.8 per cent to €3.70.

On a strong day for euro-zone banks, with gains of 10 per cent typical, AIB added 10.9 per cent to €2.03 and Bank of Ireland rose 8.3 per cent to €5.55.

Packaging group Smurfit Kappa was also one of the big climbers, advancing 7.1 per cent to €37.57, while Paddy Power owner Flutter Entertainment finished 8.2 per cent higher at €103.75.

London

The FTSE 100 ended 3.3 per cent higher as higher yields and upbeat earnings from insurer Prudential aided financial stocks, while a drop in oil prices helped allay some inflation and economic growth concerns among investors.

Prudential jumped 8.6 per cent and was among the top gainers after the Asia-focussed insurer posted a 16 per cent rise in its 2021 operating profit, though it warned of implications for global markets and the economy from Russia's invasion of Ukraine.

Tobacco manufacturer Imperial Brands joined the list of multinationals stepping back from Russia and peer British American Tobacco said it had suspended all capital investment in Russia.

The FTSE 250 advanced 4.4 per cent, with travel and leisure stocks among the top gainers.

Legal & General Group jumped 6 per cent after the life insurer and asset manager reported an 11 per cent jump in annual operating profit.

Polymetal International leaped 69.2 per cent, rebounding from a record low in the prior session, after the Russia-exposed miner said its Russian operations continued undisrupted.

Europe

German shares vaulted almost 8 per cent to lead strong gains across Europe, as investors picked up beaten-down stocks following a rout sparked by fears about the fallout from the Ukraine crisis. Italian and French shares jumped about 7 per cent each.

The pan-European Stoxx 600 index rallied 4.7 per cent, breaking a four-day losing streak during which it lost about 7 per cent.

Adidas jumped 13.6 per cent after the German sportswear company said it was expecting a sales recovery in its China business but warned of a hit of up to €250 million from halting business in Russia.

German logistics company Deutsche Post climbed 12.5 per cent after reporting a 65 per cent increase in 2021 operating profit.

Lenders UniCredit and BNP Paribas climbed about 10 per cent each, helped by a broad-based rally, as the banks unveiled their exposure to Russia.

US

The tech-heavy Nasdaq surged 3 per cent in early trading, leading a rally on Wall Street. The S&P 500 banks index added 4.9 per cent, powered by a 6.6 per cent rise in Bank of America.

Tech stocks advanced, while the energy sector was the biggest decliner, down 1.6 per cent, as oil slipped below $125 following a sharp rally this week that helped it breach $130 a barrel.

Carnival and United Airlines climbed 9 per cent and 8.4 per cent respectively, after plummeting this week as soaring oil prices threatened a nascent recovery.

General Electric rose 4.1 per cent as the company authorised a share buyback programme. – Additional reporting: Reuters