European stocks rise as banks and oil stocks lead gains
Renewed hopes for Covid-19 treatment boosts investor sentiment
Bank of Ireland added almost 10 per cent to finish at €1.96.
European stocks rose on Wednesday, as positive developments regarding a potential Covid-19 treatment lent further support to a rally in banks and oil stocks.
US equities also advanced amid the renewed hopes for a drug to fight coronavirus, helping investors shrug off data showing the biggest economic contraction since 2008.
The Iseq rose in line with improving investor sentiment over the course of the session, finishing it with a 3.8 per cent gain.
Amid a strong day for banking stocks across Europe, AIB soared 20.5 per cent to €1.33. The bank, which expects to shortly make a provision for a rise in bad loans, earlier assured shareholders via a virtual annual meeting that it had come into the crisis well-funded.
Bank of Ireland added almost 10 per cent to finish at €1.96, while Ryanair surged 10.2 per cent to €10.54.
Cement-maker CRH, the largest stock on the index, also advanced, closing up 4.6 per cent at €28.99, and insulation company Kingspan added 5.6 per cent to €48.20.
Dalata Hotel Group confirmed its revenues tumbled in the first quarter as the coronavirus pandemic took hold, but its stock managed a 9.1 per cent rise on the day, finishing at just below €2.95.
The FTSE 100 added 2.6 per cent amid gains for banks and energy stocks. Royal Dutch Shell and BP both rose more than 3 per cent as oil prices surged, while Barclays soared 12.7 per cent despite profits at the bank falling by more than 42 per cent in the first three months of the year.
Standard Chartered shares increased 11.6 per cent after the lender said it would emerge from the Covid-19 pandemic “with strength”. Electricals retailer Dixons Carphone jumped 18 per cent after saying online demand had made up for around two-thirds of store sales lost due to the lockdown.
British Airways-owner IAG fell in early trading after forecasting that passenger numbers would take years to recover and saying that it would cut more than a quarter of its jobs. However, the airline group recovered to close up 5.7 per cent.
Clothing retailer Next added almost 4 per cent despite saying total product sales in its latest quarter crashed 41 per cent as a result of the shutdown.
The Stoxx Europe 600 index posted a third straight advance, rising 1.75 per cent. The German Dax added 2.9 per cent, while the French Cac 40 was up 2.2 per cent. Spanish and Italian stocks also rose, though Italy’s bonds slipped after Fitch Ratings cut the nation’s assessment to the lowest investment grade.
Topping the Stoxx 600 was sensor specialist AMS, up 24.4 per cent after saying it expected the impact from the coronavirus in the second quarter to be limited.
Shares of Airbus jumped 10 per cent even as its quarterly profits plunged, while French oil giant joined in the gains for energy giants.
Automakers were buoyed after German carmaker Daimler forecast operating profit at its Mercedes-Benz Cars & Vans division rising in 2020, and rival Volkswagen said it expected to be profitable on a full-year basis.
Wall Street opened higher and extended gains in the first half of the session, despite confirmation that the US economy contracted by 4.8 per cent in the first quarter, the worst retreat since the financial crisis.
Gilead Sciences rose 5 per cent after the drugmaker said its experimental antiviral drug remdesivir helped improve symptoms for Covid-19 patients who were given the drug early.
Big tech shares added to the rally, with Google parent Alphabet trading 9 per cent higher after posting better-than-estimated sales. Boeing surged more than 8 per cent despite reporting quarterly losses. More big-name corporate earnings were expected after the close of markets. – Additional reporting: Reuters / Bloomberg