Markets breathe sigh of relief over Evergrande payment

Unexpected bond payment eases market fears of a default by troubled Chinese developer

Construction cranes by unfinished buildings at China Evergrande Group’s Health Valley development on the outskirts of Nanjing, China, on Friday. Photograph: Qilai Shen/Bloomberg

Construction cranes by unfinished buildings at China Evergrande Group’s Health Valley development on the outskirts of Nanjing, China, on Friday. Photograph: Qilai Shen/Bloomberg

 

European stocks rose on Friday on a surge in technology stocks, strong earnings from France’s L’Oreal and a broad boost to sentiment provided by a surprise interest payment from debt-ridden China Evergrande Group.

In the US, markets fell after comments on stimulus tapering from Federal Reserve Chair Jerome Powell spooked markets trading at record levels.

Dublin

The Iseq was up 0.75 per cent in a buoyant day for European markets, although volumes thinned out as the session neared the start of the bank holiday weekend.

Bank of Ireland performed the best of the largest stocks, finishing up almost 3.4 per cent to €5.22. The bank announced it was acquiring a loan book and taking on deposits from Belgian bank KBC, which is exiting the Irish market. It is acquiring mortgages of €8.8 billion and taking on deposits worth €4.4 billion.

Travel software firm Datalex, backed by Dermot Desmond, rose 6.25 per cent to 85 cents per share, as confidence flows back into the aviation market that it primarily serves.

Smurfit Kappa Group rose almost 2.3 per cent to €43.71.

London

The FTSE 100 rose 0.2 per cent, led by heavyweight mining and consumer staple stocks, as surveys showed the British economy unexpectedly regained momentum in October despite surging costs and worsening supply shortages. Base metal miners and and precious metal miners up 0.2 per cent and 2.4 per cent, respectively.

Large dollar earning companies, spirits maker Diageo and Dove soap maker Unilever, were among top performers as the pound fell as data showed British retail sales unexpectedly fell for a fifth month in a row in September.

JD Sports Fashion Plc added 1.9 per cent as UBS also raised its price target on the stock of Britain’s largest sportswear retailer after it bought Cosmos Sport.

Building materials supplier SIG jumped 5.6 per cent after it forecast full year underlying operating profit to be ahead of market estimates.

London Stock Exchange Group fell 6 per cent after the financial markets infrastructure provider warned supply chain shortages could affect the timing of its technology spending.

Europe

The Stoxx 600 added 0.5 per cent to close at over six-week high. News that the Chinese property developer Evergrande had made a bond payment to avert a default lifted the mood globally. Worries about contagion from a potential default have rattled markets recently.

France’s blue-chip Cac 40 rose 0.7 per cent and outperformed its European peers, riding on a 5.1 per cent surge in L’Oreal shares following the cosmetics company’s strong results.

Shares in Dutch semiconductor equipment maker ASML and German software firm SAP rose 3.2 per cent and 1.2 per cent respectively, after stumbling earlier this week following their results. The tech sector rose 1.5 per cent.

Swedish mining firm Boliden dipped 6.8 per cent as its third-quarter operating profit fell below market forecasts. Remy Cointreau rose 1.8 per cent after it said it was growing increasingly confident about its full year outlook after second-quarter sales beat expectations.

New York

Seven of the 11 major S&P 500 sector indexes were still higher by early afternoon, while the communication services sector fell over 2 per cent as it was hit by a slump in social media giants.

Facebook Inc fell 5.7 per cent and Twitter lost 4.4 per cent after Snap said privacy changes by Apple on iOS devices hurt the company’s ability to target and measure its digital advertising. Snap plummeted 25.3 per cent on the news and cast doubts over quarterly reports next week from Facebook and Twitter, social media firms that rely heavily on advertising revenue.

American Express jumped 4.9 per cent, the biggest boost to the Dow Jones Industrial Average, as it beat profit estimates for the fourth straight quarter.

Intel Corp tumbled 11.2 per cent as it missed third-quarter sales expectations, while its chief executive officer pointed to shortages of chips holding back sales of its flagship processors. – Additional reporting: Reuters