European stocks rise for third day as Evergrande concerns ease

Market heavyweights Flutter Entertainment and Ryanair decline

While European banks rose 2.2 per cent, Irish lenders counted as laggards, with AIB edging 0.5 per cent higher to €2.31, while Bank of Ireland advanced 0.4 per cent to €5.06

While European banks rose 2.2 per cent, Irish lenders counted as laggards, with AIB edging 0.5 per cent higher to €2.31, while Bank of Ireland advanced 0.4 per cent to €5.06

 

European stocks advanced for a third straight day on Thursday as global sentiment improved on easing concerns about cash-strapped developer China Evergrande, though comments from Bank of England kept London shares under pressure.

The pan-European Stoxx 600 index rose 0.9 per cent, looking to end the week with solid gains after a sharp sell-off on Monday.

Evergrande closed 17 per cent higher in Hong Kong as its chairman sought to reassure investors after the company’s unit said it had “resolved” a coupon payment on an onshore bond.

Dublin

The Iseq overall index dipped 0.2 per cent to 8,800.5, as market heavyweights Flutter Entertainment and Ryanair declined.

Flutter, the parent of bookmakers Paddy Power, dropped 1.1 per cent to €182.35, as the market continued to digest news on Wednesday that it had agreed to pay $200 million (€170 million) to the commonwealth of Kentucky – in addition to $100 million previously forfeited – to settle a long-running case involving its PokerStars unit. Flutter acquired PokerStars through its merger with the Stars Group last year.

While European banks rose 2.2 per cent, Irish lenders counted as laggards, with AIB edging 0.5 per cent higher to €2.31, while Bank of Ireland advanced 0.4 per cent to €5.06.

Irish-led but Dutch-based Corre Energy, a renewable-energy company focused on the development, construction and future operation of grid-scale underground storage facilities, as well as the production and sale of green hydrogen, rose 10 per cent to €1.10 as it floated in Dublin.

London

The UK’s blue-chip FTSE 100 declined by 0.1 per cent after the Bank of England said the case for higher interest rates “appeared to have strengthened” after it nudged up inflation forecasts for the year.

“Today’s BoE meeting produced little in the way of concrete changes, and it still believes that price rises will moderate next year, essentially a recognition that even if they did raise rates it wouldn’t really do much at present to slow the rise in prices,” said Chris Beauchamp, chief market analyst at IG.

Rate-sensitive banking stocks such as Barclays, Standard Chartered and Natwest Group rose between 0.8 per cent and 1.5 per cent, helped by a jump in benchmark bond yields .

Aero engine and automobile maker Rolls-Royce soared 3.5 per cent to a six-month high and was the top FTSE 100 gainer after Berenberg raised its target price.

London-listed shares of South Africa-based financial services group Investec gained 3.4 per cent after it said it expected an up to 114 per cent rise in half-year profits.

Mitchells & Butlers rose 1.8 per cent after it said sales over the past two months had been above pre-pandemic levels.

Europe

Boosting the auto sector, French car parts company Faurecia jumped 6.7 per cent as a strong cash flow guidance outweighed lowered 2021 financial targets due to a sharp reduction in worldwide automotive production.

Rivals Valeo gained 8.4 per cent and Continental added 2.5 per cent after a recent bout of weakness in the sector.

French vaccine maker Valneva climbed about 5.7 per cent after it said it was expanding trials of a Covid-19 vaccine candidate and remained in talks with the European Commission over a potential contract.

New York

US shares were also ahead in mid-afternoon trading, as investors brushed off concerns over the Federal Reserve’s plans to taper its bond-buying stimulus programme, while forecast raises from Accenture and Salesforce added to the positive mood.

The Fed said on Wednesday it could begin reducing its monthly bond purchases by as soon as November, and that interest rates could rise more quickly than expected by next year. The November deadline was largely priced in by markets.

IT services provider Salesforce.com jumped and was among the top boost to the S&P and the Dow after it raised its annual earnings forecast.

Accenture advanced after the IT consulting firm boosted its first-quarter outlook.

Easing concerns over a potential default by Evergrande also fed into market optimism. – Additional reporting: Reuters