Iseq lags behind as European indices rise on recovery hopes

Kingspan plunged 12% after company announces retirement of head of insulation boards business

A snowy Wall Street on Thursday.  Photograph: Bloomberg

A snowy Wall Street on Thursday. Photograph: Bloomberg

 

European shares held near 10-month highs on Thursday, as hopes of more stimulus in the US and potential Covid-19 vaccine rollouts in Europe strengthened the case for a global economic recovery.

Dublin

The Iseq underperformed its European peers, finishing the session down almost 0.5 per cent.

One of the index’s weightiest stocks, the building materials group Kingspan, plunged 12 per cent to close at €57.80 per share. Earlier on Thursday, the company announced the retirement of the head of its insulation boards business. His departure comes after Kingspan was heavily criticised in the UK over revelations at an inquiry about the use of its insulation in Grenfell Tower in London, where 72 people lost their lives in a fire in 2017.

Both main banks were buoyed by general sentiment surrounding hopes for a swift economic recovery from coronavirus. AIB was up 1.3 per cent to €1.69 while Bank of Ireland rose 3 per cent to €3.30.

London

The blue-chip Ftse 100 gave up early gains to dip 0.3 per cent, weighed down by losses in consumer staples.

WPP, the world’s biggest advertising company, rose 4.2 per cent after saying it expected net sales to return to pre-pandemic levels by 2022, a year earlier than expected.

SSP Group, the owner of Upper Crust and Caffe Ritazza snack chains, dropped about 2.7 per cent as it issued a grim sales outlook.

Outsourcing giant Serco reconfirmed profits are expected to rise 35 per cent to between £160 million and £165 million thanks, in part, to big wins under the Government’s Test and Trace contracts. But bosses said it would delay any dividend payment decision. Shares closed up 3p at 123p.

Basic materials stocks rose, with Rio Tinto up 1.0 per cent after the miner appointed chief financial officer Jakob Stausholm as its next chief executive.

Europe

European stocks climbed as authorities said the rollout of a Covid vaccine would begin before the end of the month, potentially giving a boost to the region’s battered economies.

Sentiment was also buoyed after European Union leaders cleared the bloc’s €1.8 trillion stimulus package on Wednesday.

Germany’s DAX climbed 0.8 per cent to close at its highest since February, while the pan-European Stoxx 600 index rose 0.3 per cent, both extending gains to a fourth straight session.

Topping the Stoxx 600 were shares of Singature Aviation , rocketing 40.1 per cent, and conglomerate Thyssenkrupp surging 11.3 per cent, both up on merger and acquisition chatter.

Novartis climbed 1.2 per cent after the Swiss drugmaker said it would acquire US-based neuroscience company Cadent for up to $770 million.

New York

The S&P 500 and the Nasdaq had hit record highs heading into the afternoon, on increased optimism over a coronavirus stimulus bill, even as an unexpected rise in weekly jobless claims pointed to further economic stress from the Covid-19 pandemic.

Technology stocks were among the best performing S&P sectors, with utilities and materials shares, primed to benefit from more stimulus, also making large gains. Negotiations were underway in US Congress over the details of a $900 billion aid bill, with top Democrats and Republicans sounding more positive than they have in months on a fresh response to a crisis that has killed more than 304,000 Americans and thrown millions out of work.

General Mills rose 1.1 per cent after it beat second-quarter profit estimates, boosted by sales of its pet foods and baking products.

Outsourcing services provider Accenture rose 7.4 per cent after it raised its annual sales forecast and beat quarterly revenue estimates as an extended work-from-home period boosted its digital, cloud and security services.

MacroGenics jumped 3 per cent after the drug developer said the US Food and Drug Administration had approved its treatment for an advanced type of breast cancer.

(Additional reporting: Reuters/Bloomberg/PA)