European traders soothed as Spanish crisis eases

Global shares fluctuated slightly on Wednesday ahead of the release of minutes for the US Federal Reserve’s policy meeting.

Traders in Europe were soothed by the prospect of calmer political waters in Spain and its wantaway region, Catalonia.

The Iseq index of Irish shares finished the session relatively flat.

DUBLIN

Smurfit Kappa, the paper and packaging giant and one of the heaviest weighted stocks on the index, fell 3.4 per cent on a read-through from a trading update by industry peer and fellow FTSE 100 member Mondi.

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Ryanair was up 2 per cent, as the company gained some respite from the torrent of negative newsflow that has afflicted it in recent weeks.

Housebuilder Cairn Homes was up 2 per cent, the day after a budget that was targeted at stimulating activity in the residential development sector. Its newly listed peer Glenveagh Properties, however, fell 0.5 per cent.

Hostelworld was one of the biggest fallers, finishing the session down by more than 4 per cent.

LONDON

Mondi slumped 163p to 1,926p, making it the worst performer on the FTSE 100. It came after the paper and packaging group issued a profit warning, even as it clocked an 8 per cent rise in third-quarter operating profit to £219 million.

Merlin Entertainment edged lower by 4.6p to 463.6p after the company confirmed that it was not in takeover talks with SeaWorld, a week after reports surfaced suggesting it had approached the group.

Shares in global recruitment giant Page plunged 48.4p to 477.1p. The company said Brexit uncertainty continued to take its toll on hiring, and revealed a 7.6 per cent fall in third-quarter gross profits to £34.9 million in the UK, which accounts for nearly a fifth of the group's business.

Telford Homes dropped 9.5p to 398.75p after announcing that first-half profits were likely to be "significantly lower" than the comparable period in 2016, due to the "programmed timing of development completions".

Dunelm shot up 44p to 745p as the homewares retailer reported a 24.8 per cent rise in total group revenue to £247.9 million, thanks in part to favourable weather, which helped drive more customers to its stores

EUROPE

Spain’s stocks and government bonds were in demand after Catalonia’s leader stopped short of making a formal declaration of independence, taking the edge off a political crisis in the euro zone’s fourth biggest economy. Spain’s benchmark IBEX closed 1.3 per cent higher.

Shares in Spanish banks Sabadell and CaixaBank , which have moved their legal bases from Catalonia to other parts of Spain since the referendum, rose 1.2 per cent and 0.3 per cent respectively.

Elsewhere, Italian banking stocks rose 1.4 per cent with traders citing relief that new proposals by the European Commission to strengthen the banking sector made no reference to stricter provisioning rules on the existing backlog of bad loans. Top gainers were Banco BPM and UBI Banca, which rose 4.8 and 3.9 per cent respectively.

GEA Group was the biggest gainer on the Stoxx, up 5.8 per cent, after hedge fund Elliott revealed a stake in the in German food-processing machinery firm.

US

Seven of the 11 major S&P indexes were lower, led by a 0.36 per cent drop in financial stocks.

Adding to the pressure on financials was a slight drop in US treasury yields ahead of the release of minutes from the Federal Reserve’s September meeting and the auctions of three-year and 10-year notes.

The consumer staples index was up 0.23 per cent, led by gains in Wal-Mart and Colgate-Palmolive, which rose more than 2 percent after SunTrust upgraded the stock to "buy".

General Electric slipped about 1 per cent after JPMorgan said a dividend cut was "increasingly likely" and cut its price target on the stock. J&J rose 1.5 per cent after Jefferies upgraded the stock to "buy", saying the company's pharma division would help its earnings growth top analysts' estimates.

– (Additional reporting: Bloomberg/Reuters/PA)