Italian stocks rebound and lift European equities

A robust bounce-back in Italian stocks helped lift European equities on Wednesday as investors recovered from the previous day’s sharp sell-off and digested the possibility of a new Italian election as early as July. Italian bond yields also came off multi-year highs as hopes rose of a solution to the Italian crisis.

Oil prices rose, boosting energy stocks, while Wall Street also opened higher.

Dublin

The Iseq index closed little changed on a day dominated by investors’ concerns about a possible financial crisis in Italy. AIB finished flat, but Bank of Ireland clawed back some of the previous session’s losses, adding 1.1 per cent to €7.37.

Ryanair fell almost 2 per cent to €16.32 amid lingering threats of industrial action, while the airline also agreed an option with former Formula One driver Niki Lauda that could see it take full ownership of the Laudamotion leisure airline in four years.

Ocado plays Ftse while Marks & Spencer flirts with danger

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Yield on riskiest Irish bank bonds rises as Italian turmoil rattles markets

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CRH surge gives concrete boost to Iseq

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Bank of Ireland attracts interest as markets generally flat

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Drinks group C&C was among the climbers, adding 2 per cent to €2.99, while Glenveagh Properties also had a strong day, closing up 1.6 per cent at €1.17.

Paper and packaging group Smurfit Kappa dropped 1.2 per cent to €35.44.

London

A rebound by oil stocks helped Britain’s blue-chip index recover from a global sell-off prompted by a political crisis in Italy and fresh fears of a trade war between the US and China. The UK’s Ftse 100 ended up 0.75 per cent after ending the previous session at its lowest level in nearly three weeks.

Oil majors BP and Royal Dutch Shell both rose more than 2 per cent as oil prices climbed to $76 a barrel.

Among smaller companies, Photo-Me International tumbled 26 per cent after the photobooth operator’s market update disappointed investors.

Royal Bank of Scotland fell 1.4 per cent to €276.10 after its chief financial officer, Ewen Stevenson, unexpectedly resigned to take up another unspecified opportunity.

The London Stock Exchange confirmed that retail business Ocado will be promoted into the Ftse 100 after the close of trading on June 15th, while scandal-hit G4S will be demoted to the Ftse 250 index, alongside Mediclinic International.

Europe

The pan-European Stoxx 600 index ended the day up 0.3 per cent with trading mixed across Europe. Germany’s Dax jumped 0.9 per cent, but the Cac 40 in France was down 0.2 per cent.

Italy’s Ftse MIB index came back from the previous day’s losses with a 2.1 per cent rise, but the market was still down 2.7 per cent so far this week and had given up all the gains made in 2018.

Italian banks rose 2.7 per cent following five straight days of losses. Big lenders Intesa Sanpaolo and Unicredit delivered the strongest boosts to Italian stocks, while Mediobanca and Finecobank led the index with 7.1 and 6.4 per cent gains. Spanish banks also recovered.

Bayer drove gains on the Dax, rising 3.9 per cent after winning US approval for its takeover of Monsanto. German automaker Daimler closed down 0.5 per cent at €62.87 on a day when it announced it was leading a $175 million funding round in Estonian Uber-rival Taxify.

Vivendi was the biggest faller, down nearly 4 per cent after its subsidiary Canal+ was left empty-handed in a crucial soccer broadcasting rights auction in France.

New York

Wall Street rose in early trading, with the recovery partly driven by news that Italy’s two anti-establishment parties were renewing efforts to form a government, rather than force the country to the polls for the second time this year.

The S&P energy index jumped 2.7 per cent as oil prices rose, providing the biggest boost to the S&P 500, while tech stocks also rose.

Cloud-based business software maker Salesforce.com rose 2.3 per cent, and computer and printer maker HP added 3.5 per cent after raising full-year profit forecasts.

– Additional reporting: Bloomberg / Reuters