Markets buoyant as investors in Europe and US show renewed appetite for risk

Pillar banks drive Iseq into positive territory but fuel price increases hit travel stocks

A 3.5 per cent jump in European banks and a rally in beaten-down technology companies pushed an index of European stocks up over 1 per cent on Tuesday, also helped by positive US data bolstering Wall Street.

The main indexes in New York also rose more than 1 per cent as growth stocks bounced from a sharp sell-off.

DUBLIN

The Iseq finished the session ahead by almost 0.6 per cent, driven by a strong performance by the major banks.

The two pillar banks surged on the back of positive sentiment towards the sector throughout Europe. AIB was up by more than 5 per cent to €2.47, while Bank of Ireland finished ahead by 3.25 per cent to €5.11.

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The increase in fuel prices had a negative impact on many travel stocks. Irish Continental Group (ICG), the owner of Irish Ferries, was down 2.3 per cent to close at €4.44. Meanwhile, budget airline Ryanair fell 0.6 per cent to €17.55, giving up some of its recent gains.

Tullow Oil, which maintains its main listing in London, was ahead by 2.1 per cent to 54 cent per share.

LONDON

The FTSE 100 rallied from recent losses as signs of a recovery saw investors piling into economically sensitive sectors, with energy stocks rising as oil prices hit three-year highs. The blue-chip index gained 0.9 per cent after three straight sessions of losses, aided by an over 2 per cent jump in both banks and life insurance stocks.

Baker and fast-food chain Greggs performed strongly, rising 11.1 per cent after it raised its full-year profit forecast despite supply chain and staffing disruptions.

Britain's auto sector dropped 1.2 per cent after preliminary industry data showed new car registrations marked the weakest September for at least 23 years. Melrose Industries declined 1.1 per cent after saying the global chip shortage led to a surge in monthly cancellations from its customers in the auto industry.

EUROPE

The pan-European Stoxx 600 index ended up 1.2 per cent with all major sectors in the black, helping it log its best session since July 21st.

The European tech sector jumped 2.2 per cent, breaking a seven-session losing run over which it fell 11.7 per cent. US peers also rallied as investors moved into growth names. German chipmaker Infineon's 4.8 per cent climb led gains after it confirmed its 2021 revenue and said it expects results to rise further next year.

Shares in Italy's Unicredit bank jumped 4.3 per cent after it confirmed its third-quarter forecast to analysts.

German leasing company Grenke tumbled 6.7 per cent after it cut its full-year forecast range, while audio solutions provider GN Store Nord slumped 7 per cent after a forecast cut at the company's Hearing unit due to delays in product launches.

Dutch tech investor Prosus rose 2.6 per cent after it got regulatory approval to increase its stake in German food delivery company Delivery Hero.

NEW YORK

Eight of the 11 major S&P 500 sectors were trading higher. Energy and technology led gains, while the defensive real estate and utilities sectors lagged in a sign that investors were gradually moving towards more risk-taking.

The S&P 500 was on track for a fourth straight day of 1 per cent moves in either direction. The last time the index saw that amount of volatility was in November 2020, when it rose or fell 1 per cent or more for seven straight sessions.

High-growth stocks including Apple, Amazon. com, Microsoft, Netflix and Alphabet rose between 0.4 per cent and 3.3 per cent in early afternoon trading.

Facebook was up 1.9 per cent after taking a beating a day earlier, when its app and its photo-sharing platform Instagram were down for hours before being restored late in the evening.

PepsiCo gained 1.4 per cent on raising its full-year revenue forecast.

– Additional reporting: Reuters

Mark Paul

Mark Paul

Mark Paul is Business Affairs Correspondent of The Irish Times. He also writes the Caveat column