Geopolitical concerns dampen European market sentiment

US market closed due to Labor Day holiday but UK markets perform well

The evolution of the main Spanish stock market index IBEX 35 on view in Madrid on Monday. Photograph: EPA/ZIPI

The evolution of the main Spanish stock market index IBEX 35 on view in Madrid on Monday. Photograph: EPA/ZIPI

 

European shares ended little changed on Monday as worries about US trade policy and concern over emerging markets weighed on stocks after Asian markets closed lower.

In the UK, markets performed strongly on the back of further weakening of sterling versus the dollar.

Markets in the US remained closed for the Labor Day holiday, which dampened trading volumes in Ireland and elsewhere in Europe.

DUBLIN

The Iseq rose by 0.2 per cent on low volumes, with share turnover of €185 million at only about half of normal volumes due to lack of US activity.

Smurfit Kappa rose almost 1.8 per cent to close at €35.80, after it emerged that the Government has given the company backing in its dispute with Venezuelan authorities over the seizure of its plant in the troubled South American state.

A report from the Financial Times said the government had, through European Union intermediaries, told the Venezuelan authorities it was “extremely concerned” about the seizure.

Housebuilder Glenveagh Properties fell 1.7 per cent to close at €1.06 per share. It reported interim results and confirmed it has spent close to €500 million acquiring a landbank. Meanwhile, ratings agency S&P predicted a gentle tapering off of Irish house price rises.

Dalata hotel group fell 1.1 per cent, ahead of its results on Tuesday morning.

LONDON

Sterling started the week on the back foot , dragged down by weak manufacturing figures and yet more Brexit uncertainty. The pound shed 0.6 per cent versus the dollar to end the session at 1.288, while it fell 0.7 per cent against the euro.

The FTSE 100, meanwhile, feasted on the pound’s weakness, closing up 72.18 points, or 0.97 per cent, at 7,504.6p and snapping a three-day losing streak. A weaker pound boosts earnings for multinationals, which report in dollars.

Royal Mail shares surged towards the top of London’s premier index after the postal firm splashed out £213 million to acquire Canadian parcel delivery company Dicom. The deal, struck through Royal Mail subsidiary General Logistics Systems, is part of the company’s geographic diversification strategy. Shares closed up 13.5p at 461.5p.

WPP shares flatlined after the ad giant confirmed that Mark Read is to become chief executive, months after the departure of long-standing boss Martin Sorrell in controversial circumstances.

Mr Read, who previously headed up WPP’s Wunderman business, had been acting as joint operating chief. The stock ended up 2p at 1,276.5p.

Dechra Pharmaceuticals plunged after the veterinary drugs manufacturer warned its contingency planning for a hard Brexit will result in higher costs.

The company said it will set up a testing facility in the European Union and transfer product registrations to a subsidiary within the bloc, with costs set to total over £2 million. Shares collapsed 668p to 2,452p.

EUROPE

Germany’s DAX was down 0.2 per cent and France’s CAC was up 0.03 per cent, on thin trading volumes hit by lack of activity from US investors. The pan-European STOXX 600 index gained 0.05 per cent to 382.46 points.

Belgian nappy manufacturer Ontex fell 19.5 per cent after rejecting a proposed cash offer for its outstanding shares from the private equity firm PAI Partners, saying it undervalued the company.

The best performance was posted by the Dutch offshore energy company SMB, which rose 10.7 per cent after announcing that it had reached a settlement in Brazil over alleged improper sales practices.

In France, the retailer Casino rose as much as 4 per cent after confirming its 2018 targets, only to reverse course and end down 3 per cent. Casino’s shares fell 10 per cent on Friday amid concern over its debt, and it has been targeted by US short seller Muddy Waters. Drug maker Sanofi gained 1.1 per cent after securing approval in Europe for a blood clotting disorder treatment using nanobodies.

(Additional reporting: PA/Reuters)