Iseq reaches highest level since February amid US stimulus hopes
UK shares rise on post-Brexit trade deal optimism
Travel stocks were also in demand, with Ryanair up 2.1 per cent and Irish Continental Group advancing 4.5%. Photograph: Cyril Byrne
European shares advanced on Thursday, with Dublin’s Iseq reaching levels not since global markets started to sell off in late February as Covid-19 spread through western economies. Investors pinned hopes on more US stimulus even as coronavirus cases surged again across the continent.
The pan-European Stoxx 600 index closed 0.8 per cent higher after making hesitant gains in morning trading. The Iseq index gained 0.9 per cent to 6,683.58.
Bank of Ireland advanced 3.7 per cent to €1.82, as investors internationally moved back into the beaten-down sector. Still, AIB was an underperformer, gaining just 0.2 per cent to 94.2 cents.
Aryzta moved 8 per cent higher to 59.4c amid renewed speculation that the company would either sell off some underperforming assets or secure a firm bid from US hedge fund Elliot Management, which has been circling the baked goods group.
Travel stocks were also in demand, with Ryanair up 2.1 per cent and Irish Continental Group advancing 4.5 per cent.
UK shares rose after the Bank of England governor said he thought a post-Brexit trade deal was possible and hinted at additional stimulus as rising numbers of coronavirus cases led to fresh restrictions.
Bank of England governor Andrew Bailey said risks to Britain’s economy were “very much on the downside” and that the central bank was ready to use its policy firepower to limit the impact of a second wave of Covid-19 cases.
The Ftse 100 index rose 0.5 per cent to close near a one-month high, with oil stocks leading gains as crude prices jumped on hopes of some US coronavirus relief aid.
In an earnings-heavy day, Ladbrokes and Bwin owner GVC Holdings pared early gains to close up 0.7 per cent at a two-year high after it raised its outlook for annual core earnings on the back of a 12 per cent rise in third quarter revenue.
British tobacco company Imperial Brands fell 0.3 per cent after forecasting its full-year net revenue would be broadly flat and in line with market estimates.
Sectors such as banks, oil and gas, and travel and leisure were among the top gainers across Europe.
Airline stocks also jumped, with Aer Lingus owner IAG and Lufthansa up 10.3 per cent and 6.1 per cent respectively. The gains came even as coronavirus cases surged across Europe, with more than 17,540 new daily cases recorded in the UK, while hospitals in the Paris region moved into emergency mode.
Spain’s Telefonica gained nearly 3 per cent after Reuters reported it was in the final stages of negotiating a roughly €5 billion deal to build a fibre-optic network in Germany.
Wall Street’s main indexes were higher in early afternoon trading as US president Donald Trump signalled progress in negotiations around new fiscal stimulus, while data showed a recovery in the labour market struggled to gain momentum.
Two days after calling off talks on a comprehensive fiscal aid bill, Mr Trump said some discussions were ongoing with Democrats about boosting support for US airlines and providing Americans with $1,200 stimulus cheques.
International Business Machines Corp rose after saying it was splitting itself into two public companies, capping its years-long effort to diversify away from its legacy businesses to focus on high-margin cloud computing.
Eaton Vance surged and was on course for its best day ever after Morgan Stanley agreed to buy the asset management firm for about $7 billion in a cash-and-stock deal.