European stocks closed higher on Thursday as a bounce in Wall Street stocks, gains in airlines and upbeat earnings reports drove a reversal of early losses across markets. However, the UK’s blue-chip index fell as its contingent of exporters came under pressure following a gain in sterling.
In the US, Wall Street’s main indexes jumped as mega-cap technology stocks tried to regain lost ground following a sharp sell-off after fears eased around hedge funds selling off long positions to cover a short squeeze.
The Iseq finished the session ahead by more than 1 per cent.
The main Irish banks drove the index forward, after both of the two big institutions regained ground they had lost in recent days. AIB closed at €1.48, up 5.2 per cent. Bank of Ireland, meanwhile, rose 6 per cent to close at €3.13.
Ryanair also rose, up by 3.6 per cent to €14.50, as many European airlines rose as an indirect result of a short squeeze on American Airlines. It has filed a suit in a European Union court to try to scupper its rival Lufthansa's €9 billion bailout.
The Ftse 100 hit a near one-month low as energy stocks tracked commodity prices lower following virus and lockdown-led demand worries, while the vaccine row between the European Union and AstraZeneca continued to weigh.
AstraZeneca was the second-biggest drag on the Ftse 100 index as Britain demanded it must receive all the Covid-19 vaccines it had ordered.
Insurer Prudential was the top drag after it said it would separate its US business Jackson through a demerger and may raise up to $3 billion in new equity.
British airline easyJet gained 4.6 per cent even as it warned that its prospect had worsened for the January-March quarter. London-listed shares of Hungarian airline Wizz Air jumped 4.7 per cent after it vowed to use the coronavirus crisis to grab business from rivals including easyJet.
It is believed that some European airline share prices may have risen as they were caught up in a squeeze of holders of short positions in American Airlines.
After falling as much as 2 per cent in morning trade, the pan-European Stoxx 600 rose 0.1 per cent by the close, leaving the benchmark with small gains for the year. The German Dax gained 0.3 per cent, and France’s Cac 40 was up 0.9 per cent.
Even though the news emerged that Ryanair is trying to scupper Lufthansa's state bailout, the German airline rose 6.3 per cent as, along with other European carriers, it was also overbid in the fallout from American Airlines.
Other European stocks that were highly bid this week, such as CD Projekt, Ambu and Varta, extended gains, while Nokia tumbled 13 per cent.
Swedish medical equipment maker Getinge jumped 9 per cent after reporting strong quarterly results as it saw a spike in demand in 2020 for ventilators and other advanced life support equipment due to the pandemic.
Shares in GameStop and AMC Entertainment Holdings tumbled as trading platforms including Robinhood and Interactive Brokers restricted trading in stocks that soared this week in a social media-driven trading frenzy that shook stock markets.
American Airlines joined the list of stocks making gains as small-time traders broadened their battle with major Wall Street institutions, but it too was well off earlier highs as Robinhood restricted trading. It was up 8 per cent.
Heavyweights including Microsoft, Facebook, Netflix and Alphabet led gains, after the US stock indexes suffered their worst day in three months.
Apple reported holiday-quarter sales and profit that beat Wall Street expectations; however, shares of the iPhone maker fell 2 per cent. Facebook rose 0.7 per cent on soundly beating quarterly revenue estimates, while Tesla shed 3.2 per cent after posting disappointing fourth-quarter results.
– Additional reporting: Reuters