Shares rise on speculation about reduced Deutsche Bank settlement

Stock prices across major markets stabilised on Friday, while the euro recovered as Deutsche Bank’s shares clawed away from record lows on reports it was close to a deal to reduce a massive settlement over misselling of mortgage bonds.

The MSCI All-Country World Index rose 0.2 per cent, extending the quarter’s advance to 4.9 per cent, while the Stoxx Europe 600 Index rose 0.1 per cent, after earlier sliding as much as 1.7 per cent.

DUBLIN

It was a game of two halves in Dublin on Friday, according to analysts, with shares rebounding in the latter part of the day after sliding early on due to concern over the financial health of Deutsche Bank.

The Iseq index of leading shares closed marginally higher, up 36.78 points to 6,034.83.

Bank of Ireland joined other financial stocks in rising on the back of Deutsche's recovery, gaining 2.2 per cent to end the day at 18 cent, having fallen below 17 cents earlier in the day.

Confirmation that Dalata has agreed to lease the capital’s largest city hotel was well received. The former Burlington, which now trades as Doubletree by Hilton, is shortly to be renamed under the Clayton brand. Shares in the hotel group rose by nearly 4 per cent to €4.10 following news of the deal.

Other movers in Dublin on Friday included Kerry Group, which rebounded from a low of €71.79 to close up 1.5 per cent to €74.16. Glanbia was up 2.3 per cent to €17.12 while C&C was down 2.1 per cent to €3.69.

LONDON

Britain’s top share index dropped on Friday, taking the shine off a strong quarter, as miners fell and financials stocks eased on uncertainty over Deutsche Bank’s financial health and as a spate of broker downgrades hit outsourcer Capita.

The FTSE 100 was down 0.3 per cent at 6,899.33 points at its close, underperforming the broader European market.

The top individual faller was Capita, down 4 per cent and slumping for a second straight day. The outsourcer fell after a profit warning on Thursday and a swathe of target price cuts on Friday, making it the worst-performing stock in Europe this quarter, down more than 30 per cent.

Among the top gainers, housebuilding stocks Barratt Developments and Persimmon rose more than 4 per cent with analysts citing a supportive broker note from Liberum, as well as data from Nationwide which showed that house prices continued to rise in September, albeit at a slower rate than in August.

Royal Bank of Scotland (RBS) shares fell 1.7p after it said would complete the ring-fencing of its retail banking operations by the end of 2018.

EUROPE

European stocks trimmed declines after Deutsche Bank recovered losses amid easing investor concern about its financial health.

Commerzbank fell 2.6 per cent toward an almost eight-week low, while Italy's UniCredit and Spain's Banco Santander also declined.

Among other shares, Telefónica lost 4.4 per cent after cancelling an initial public offering of its infrastructure unit Telxius Telecom, amid tepid investor demand. Hennes & Mauritz fell 2.9 per cent after the fashion retailer reported worse-than-estimated revenue growth in September and said a weak start to the autumn season raises the risk of higher discounting in the fourth quarter.

NEW YORK

Shares of JP Morgan, Bank of America Citigroup and Morgan Stanley rose between 1.6 per cent and 2.8 per cent and were among the top influences on the S&P 500 index after news of a possible reduced settlement for Deutsche Bank.

Qualcomm gained 3.7 per cent, extending its climb since June to 30 per cent, the best since 2010. The shares jumped Thursday on a report it is considering buying NXP Semiconductors in a deal that would be valued at about $30 billion.

Cognizant shares plunged 14.6 per cent, making it the biggest loser among S&P companies, after the IT services provider said it was conducting an internal investigation into possible violations of anti-corrupt practices laws related to payments in India.

– Additional reporting: agencies