Markets wrap: London’s blue chip equity index hits new high

European stocks fell yesterday but the London market performed well as investors seeking to counter sterling’s collapse bought into companies who do much of their business in dollars.

DUBLIN

The Irish market held its own as leading stocks gained ground.

Ryanair

climbed 1.62 per cent to close at €11.32, ending what traders said had been a tough period for it shares, which suffered as sterling fell and oil prices began to rise.

The increase in its price came despite a note from stockbrokers Davy downgrading the stock in light of the sterling collapse, prompted by signals that the British government will opt for a “hard” Brexit.

Gambling giant Paddy Power Betfair added 0.9 per cent on light volumes to close at €95.50. Talks on a possible merger between rival William Hill and Poker Stars' Canadian owner, Amaya, aided the stock.

Building materials giant CRH, which had a successful bond issue yesterday morning, fell 1.87 per cent to close at €29.65. More than 1.26 million of its shares changed hands in Dublin.

Bank of Ireland tumbled by 3.89 per cent, to 17.3 cent, following a downgrade from Credit Suisse. Permanent TSB inched up 0.69 per cent to close at €2.195. AIB dipped 0.66 per cent to €5.712.

LONDON

Britain’s blue-chip equity index hit an all-time high while the mid-cap index outperformed European peers as sterling came under renewed pressure, though a fall in commodity-related stocks weighed.

Irish builder Cairn Homes gained 3.14 per cent, to close at €1.15 (its shares are listed in euro) on back of the news first-time house buyers will receive a tax break in Budget 2017.

Sterling's plunge on fears of a hard Brexit has given a boost to those international companies of the FTSE 100 that earn substantial US dollar revenues – and receive a currency-related accounting lift because those dollars are converted to pounds. Victrex rose 5.4 per cent after posting better-than-forecast annual sales.

Stocks exposed to South Africa, including Old Mutual and Mediclinic, fell after the South African finance minister was ordered to appear in court over fraud charges, knocking the rand and weighing on the FTSE 100. Commodity stocks were another drag, with mining firms Glencore, BHP Billiton and Rio Tinto all falling 1.9 per cent to 2.7 per cent on weaker metals and oil prices.

EUROPE

The Stoxx

Europe

600 Index slid 0.5 per cent at the close, with miners and energy shares leading declines. More than 150 Stoxx 600 companies are due to report results this month.

Italy's FTSE MIB Index slid 1 per cent – the biggest drop among western European markets, with utilities and Intesa Sanpaolo contributing the most to losses. LVMH climbed 4.5 per cent, leading luxury-goods shares higher after posting sales that topped analysts' estimates. Christian Dior and Swatch Group rose at least 4.1 per cent.

Travel shares also advanced, with Lufthansa up 5 per cent after reporting an increase in passenger traffic in September. IAG gained 3.7 per cent after Bank of America Merrill Lynch said it preferred the shares among European airlines, citing cost savings and exposure to Heathrow airport.

NEW YORK

Wall Street sold off yesterday as disappointing corporate reports gave a sour tone to the start of earnings season and investors digested possible changing dynamics for the upcoming U.S. elections.

Alcoa shares tumbled 11.4 per cent after the metals company's quarterly profit missed estimates and it lowered its revenue forecast. Illumina shares plummeted 24.8 per cent and were among biggest drags on the S&P 500.

Energy shares fell 1.2 percent as oil prices retreated from one-year highs.

(– Additional reporting: Bloomberg, Reuters)