Shares rise as investors hold out for more US stimulus
Markets report: Iseq up 1.14% as travel stocks and banks gain
In Dublin, Ryanair rebounded by 6.62 per cent on the day to €11.19. Photograph: Dara Mac Dónaill
European shares closed modestly higher on Tuesday, as investors assessed a batch of mixed earnings reports while holding out for more US stimulus to limit the economic damage of Covid-19.
The Iseq all-share index gained 1.14 per cent on Tuesday with travel stocks and banks among gainers. Irish Continental Group rose 3.54 per cent to €3.36 after the company said it was in a strong financial position to weather the Covid-19 storm. Still, revenues at the group fell more than 21 per cent in the first half of this year, it said in a trading update.
Meanwhile, Ryanair rebounded by 6.62 per cent on the day to €11.19. Ryanair Dac boss Eddie Wilson called on the Government to add the EU 27 and UK to its green list of countries for safe travel on Tuesday, warning that unless the Republic began opening up to air travel it would suffer structural damage to its economy within six months.
Dublin-headquartered convenience food group Greencore gained 11.2 per cent in London after it noted that there was “encouraging” improvement in demand in the third and fourth quarters of its financial year. Nevertheless, revenue slipped 34 per cent in the third quarter and 10.6 per cent in the year to date.
Both AIB and Bank of Ireland gained on the day despite the latter being hit with a fine from the Central Bank. Bank of Ireland climbed 4.24 per cent to €1.845 despite being fined €1.66 million for regulatory breaches. AIB closed up 0.34 per cent at €1.18.
London’s FTSE 100 ended a volatile session higher on Tuesday with consumer, real-estate, healthcare and utility stocks leading gains. The blue-chip FTSE 100 closed up 0.4 per cent, while the mid-cap FTSE 250 added 0.7 per cent.
Greeting card retailer Card Factory posted its best day in more than a month as sales at its stores since they reopened had exceeded expectations, while consumer products maker Reckitt Benckiser rose 1 per cent on reporting better-than-expected quarterly results.
Despite posting a jump in sales, food-to-go retailer Greggs slumped 6.2 per cent, as investors fretted about the impact of social distancing on sales volumes at reopened stores.
The pan-European Stoxx 600 rose 0.4 per cent, with defensive sectors such as healthcare, food and beverage and utilities boosting the main index. Travel stocks rebounded from losses on Monday when worries of a resurgence in coronavirus cases in Europe hit risk sentiment.
Luxury giant LVMH slid 4.1 per cent as store closures sparked by the pandemic tore a hole into the Louis Vuitton owner’s second-quarter sales. Gucci owner Kering and France’s Hermes slipped more than 2 per cent, while Moncler, which makes luxury puffer jackets, shed 4.4 per cent after reporting a first-half operating loss for the first time in its history.
Peugeot maker PSA Group rose 2.4 per cent as it held on to its margin target despite a fall in profitability in the first half of 2020.
Online takeaway food company Delivery Hero jumped 2.4 per cent after it raised its forecast for 2020 sales after nearly doubling quarterly revenues.
The blue-chip Dow index was weighed down by 3M and McDonald’s shares after the companies reported quarterly profits that missed estimates.
Industrial conglomerate 3M dropped 4.3 per cent as it reported a plunge in demand across its business units in the second quarter.
McDonald’s fell 2 per cent after posting a bigger-than-expected drop in global same-store sales and missing profit expectations, as its restaurants were shut due to the pandemic.
Pfizer, on the other hand, rose 2.7 per cent after it raised its full-year forecast on strong demand for cancer drugs and blood thinners and announced plans for a phase-three trial of the Covid-19 vaccine candidate on which it is working with Germany’s BioNTech.
Harley-Davidson slid 7.8 per cent after reporting an unexpected quarterly loss due to disruptions caused by the virus outbreak. – Additional reporting: Reuters