Italian budget deficit moves boosts markets

Markets report: Iseq close up 1% with slight rebound for Ryanair

Building materials group CRH was another climber, adding 1.9 per cent to €28.69.

Building materials group CRH was another climber, adding 1.9 per cent to €28.69.

 

Italian stocks turned from drag to boost for European markets as signs the government would target a lower budget deficit quelled investors’ fears of a damaging showdown with the European Commission.

On Wall Street, stocks flirted with record highs as the market remained upbeat about the strength of the economy.

DUBLIN

The Iseq closed up 1 per cent, beating the positive performance across much of Europe. It was buoyed by a slight rebound for Ryanair, which closed up 2.5 per cent at €11.62 after a torrid two-day decline in its shares in the wake of a profit warning.

Building materials group CRH was another climber, adding 1.9 per cent to €28.69, while drinks company C&C added almost 1.5 per cent to €3.45. Swiss-Irish baked goods group Aryzta also continued its recent recovery, surging 8.9 per cent to €9.94 in its Dublin listing, albeit on low volume.

Bank of Ireland held onto most of its gains, finishing up 2.2 per cent at €6.84 as financial stocks rose across Europe.

Dalata Hotel Group, Glenveagh Properties and Providence Resources were among the fallers.

LONDON

The UK’s top share index rose as the pound held its ground after an appeal for party unity from prime minister Theresa May over her Brexit plan, while Tesco had its worst trading day in four years after a disappointing update.

Shares in Britain’s biggest retailer fell sharply after it missed first-half profit forecasts. The stock closed down 8.6 per cent at 215 pence.

Overall, the FTSE 100 closed up 0.5 per cent, tracking gains across European markets which bounced on easing worries over Italy’s budget targets.

Losses in Tesco were more than offset by strength elsewhere, with banks and miners among the biggest gainers.

Aston Martin fell 4.7 per cent on its stock market debut after the luxury carmaker priced its shares at £19 each, giving it a valuation of $5.6 billion.

Britain’s biggest free-to-air commercial broadcaster ITV rose 3.7 per cent after dismissing reports that it will bid for production group Endemol Shine.

EUROPE

Italy’s FTSE MIB outperformed European stocks and closed up 0.9 per cent while the leading euro zone stocks index and the pan-European Stoxx 600 climbed 0.8 per cent and 0.6 per cent respectively. In Paris, the Cac 40 rose 0.4 per cent, but in Frankfurt, the Dax ended 0.4 per cent in the red.

European banks which were benefiting from the easing tensions in Italy gave up most of their gains in late afternoon trading. Estonia’s central bank said lenders doing business in the country, which has been at the centre of a money-laundering scandal involving Danske Bank, handled more than $1 trillion in cross-border flows between 2008 and 2017.

Oslo-listed aluminium firm Norsk Hydro was the biggest individual faller, tumbling 11.9 per cent after announcing it would shut all output from its Alunorte alumina refinery in Brazil.

Shares in French tech consultancy Altran jumped 9.1 per cent after Kepler Cheuvreux analysts upgraded the stock to “buy” from “hold”.

US

The Dow Jones hit a new high, while the S&P 500 Index headed for a record close as data on private payrolls and US services industries underscored the economy’s robustness at the same time Federal Reserve chairman Jerome Powell signalled no rush to raise rates with inflation in check.

Among technology stocks, Intel gained 1.3 per cent, with gains being attributed to a research firm’s prediction that the chipmaker could beat Wall Street’s targets for the fourth quarter.

General Motors rose 2.1 per cent after Honda said it would invest $2 billion over 12 years in its Cruise self-driving unit.

Luxury fashion brand Michael Kors rose 2.3 per cent after Citi upgraded the stock on expectations its recent purchase of Italian fashion house Versace would boost performance. – Additional reporting: Reuters/Bloomberg.