Markets bounce back following weeks of nervy instability
Good news for Hostelworld in Dublin as Kingspan continues to rise
In the US the Dow Jones opened more than 100 points higher and the S&P 500 gained more than half a per cent as investors went bargain-hunting
Markets were more buoyant on Tuesday following some weeks of caution due to an unstable international political climate. “People were back buying stocks across in Ireland, but also in Europe and the United States,” noted an analyst with Davy.
The Iseq Index finished the day up 0.9 per cent on the back of some positive moves for Irish-listed companies.
Hostelworld published strong results, and finished up 15 per cent on the day after strong moves since morning. “It has had a pretty bad run of it in recent weeks, so the company was regaining a lot of that ground,” said the Davy analyst.
Ryanair was up 60 basis points.Following the announcement that paper and packaging giant Smurfit Kappa had expanded its Russian operations with the acquisition of the corrugated packaging company Soyuz, its stock rose just under 1 per cent.
It was a quiet day in relation to property as Green Reit and Hibernia Reit unperformed by 30-40 basis points. Ires Reit was also down slightly, but there was not significant liquidity.
Shares in building materials company Kingspan had soared almost 10 per cent to €31.409 late on Friday after it reported that pretax profits rose 5.5 per cent to €163.3 million in the first six months of the year.The good news continued to flow for the company as its shares rose a further 2 per cent on Monday, before climbing another 1.7 per cent on Tuesday.
“Kingspan continued it’s fairly large move upwards since its results on Friday,” said the Davy analyst. “It’s up a whopping 13 per cent or more since then after continuing its rally, so it is still outperforming.”
A fall of more than 60 per cent by subprime lender Provident Financial following another profit warning dominated London trading, although the broader market was supported by stronger commodities and a weaker pound.
The blue-chip FTSE 100 index rose 0.9 per cent, underpinned by mining shares and gains in almost all stocks. The Mid-Cap index, which is more domestically focused and is often penalised when sterling falls, added 0.5 per cent.
Provident Financial tumbled 66 per cent, its biggest ever daily drop, after it issued its second profit warning in two months, cancelled its dividend and said its chief executive was leaving.
“A catastrophic share price drop in a subprime lender – it’s like the last 10 years never happened. Is this a Northern Rock moment? Probably not – this is more about management failings than a market-wide issue,” said an analyst.
The French Cac and German Dax ended the day higher by 0.9 per cent and 1.4 per cent respectively. In oil markets Brent crude prices edged higher 0.1 per cent to around $51.77 per barrel as investors waited for inventory data out of the US.
European stocks joined a rally across most Asian equities following three days of losses, though trading volumes were once again depressed.
The Stoxx Europe 600 Index rebounded from the lowest in more than a week as miners and chemical-makers led gains across almost every sector.
In the United States, the Dow Jones opened more than 100 points higher and the S&P 500 gained more than half a per cent as investors went bargain hunting following the most turbulent two weeks since the election of US president Donald Trump.
The Dow Jones Industrial Average rose 137.26 points, or 0.63 per cent, to 21,841.01. The S&P 500 gained 16.65 points, or 0.69 per cent, to 2,445.02, and the Nasdaq Composite added 61.80 points, or 0.99 per cent, to 6,274.93.
The central banking conference in Jackson Hole, Wyoming, starts Thursday, with Federal Reserve chair Janet Yellen’s speech on Friday of key interest to market participants. – Additional reporting: agencies