World stock markets climbed on Monday, lifted by optimism over the outlook for corporate earnings and US president Donald Trump's tax reform plan, while the US dollar gained after a manufacturing index rose to its highest level since 2004. Spanish borrowing costs rose and stocks fell as a violent police crackdown on an independence vote in Catalonia rattled investors, but major European bourses gained on travel stocks and a mining sector helped by higher metals prices.
The Iseq was largely unchanged on the day, trading two points down at 6,879. The main mover was Ryanair, which traded up 2.5 per cent at €16.72 following the collapse of Monarch Airlines. The carrier, the UK's fifth biggest, was placed into administration earlier in the day and this spurred a rally across European carriers on the prospect of scooping up bookings from customers switching airlines.
Cairn Homes was down 1.2 per cent at €1.69 following the news that rival Glenveagh Properties, the new Irish housebuilder backed by US private equity firm Oaktree Capital, plans to raise up to € 550 million through an initial public offering (IPO) by the middle of next week.
Bank of Ireland was up marginally at €6.94 as new chief executive Francesca McDonagh took over as chief executive. Rival Permanent TSB, meanwhile, enjoyed a near 4 per cent jump to €1.92.
Food group Kerry was up nearly 2 per cent at €82.76 amid positive sentiment for sector internationally.
London-listed Irish convenience food firm Greencore was down 7 per cent at £1.82 following a product recall in the US. The company was forced into recalling several sandwich lines after traces of listeria were found at a plant in Rhode Island.
The UK's top share index, meanwhile, rose to a four-week high on Monday as homebuilders rallied thanks to an extension of a government housing scheme, while airlines and miners also gained. The blue chip FTSE 100 index ended up 0.9 per cent at 7,438.84 points, slightly outperforming a broadly positive European market, helped by a fall in sterling. Housebuilders Persimmon, Barratt Developments and Taylor Wimpey were among the biggest gainers, jumping 2 per cent to 4.2 per cent after UK prime minister Theresa May pledged £10 billion pounds of extra funding to help people buy new homes.
Similar to Ryanair budget airline easyJet jumped 5.2 per cent after peer Monarch Airlines went bust while shares in British Airways operator IAG also rose 2.4 per cent.
The Spanish government’s borrowing costs surged and its stock market tumbled on Monday as investors weighed up the political fallout from the violent police crackdown on an independence vote in the wealthy region of Catalonia.
In a note, analysts at ABN Amro said that everything else being equal, Spain's government debt ratio would probably rise from around 99 per cent of gross domestic product now to around 115 percent in case of an independent Catalonia. Spain's benchmark IBEX equity index closed down 1.5 per cent, its biggest one-day fall in almost two months.
Banco de Sabadell and Caixabank, both based in Catalonia, fell around 4.5 per cent each. The impact outside Spain was modest, with the euro losing 0.5 percent against a broadly stronger dollar. The sharp rise in Spanish government bond yields also pulled its Italian peers to their highest in two months at 2.26 per cent.
All the three major US stock indexes were hovering near record highs on Monday morning, in a strong start to the fourth quarter, boosted by technology and healthcare stocks and after data pointed to underlying strength in the economy.
However, shares of casino operators were lower, while those of gunmakers were higher after a gunman killed at least 58 people in Las Vegas on Sunday in the largest mass shooting in US history. Investors have pinned hopes on President Donald Trump's tax reform plan, which envisages lowering corporate tax to 20 per cent.
Nine of the 11 major S&P indexes were positive on Monday, led by healthcare and technology sectors. Boosting the broader index was Johnson & Johnson, Gilead Sciences among healthcare stocks and Microsoft and Intel among tech. But the gains were tempered by a drop in energy. The energy sector was down 0.75 per cent , led by Exxon Mobil and Chevron, after a rise in US drilling and higher Opec output put brakes on a rally that helped prices register their biggest third-quarter gain in 13 years.
Additional reporting by Reuters/Bloomberg