Shares surge in Dublin after agreement on programme for government

Markets report: Stocks rally worldwide on hopes of post-pandemic economic rebound

The airline sector had a positive day, with Aer Lingus and Ryanair adding to their share prices

The airline sector had a positive day, with Aer Lingus and Ryanair adding to their share prices

 

Stocks around the world surged on Tuesday as the prospect of historic monetary and fiscal stimulus revived hopes of an economic rebound from the Covid-19 pandemic.

DUBLIN

Euronext Dublin finished the day up almost 3 per cent on what was described by one trader as “a good day for Ireland Inc” as markets reacted to the signing off on a programme for government by political leaders.

“There was a lot of green across the board,” the trader said, noting that the standout performers were the Irish banks. Bank of Ireland finished the day up 11 per cent, while AIB grew its share price by 8.5 per cent.

The airline sector also had a positive day, with Aer Lingus owner International Airlines Group, led by Willie Walsh, up 5.8 per cent, while EasyJet rose 4.5 per cent. Ryanair lagged some of its rivals slightly but still finished the day up 2.5 per cent.

News of a nearly $1 trillion (€888bn) infrastructure proposal by the Trump administration helped building materials group CRH add 7 per cent to its share price.

A positive day for UK home-builders buoyed the Irish sector, with Glenveagh Properties up nearly 4 per cent, and Cairn Homes up 4.5 per cent.

Elsewhere, Paddy Power Betfair owner Flutter ended the day down 2 per cent, while Applegreen was up 3.5 per cent, and hotel operator Dalata rose just under 1 per cent.

LONDON

UK shares posted their best session in a month as hopes of more global stimulus and a record rise in US retail sales eased worries that recovery from the pandemic-induced slump would take a long time.

British blue-chips rose 2.9 per cent as expectations of further stimulus from the Bank of England built on gains made after the US Federal Reserve’s move to expand its corporate bonds purchases.

Consumer staples led gains. Banks followed, even though Britain’s financial sector regulator told lenders to brace for a pile-up of debt as businesses are likely to default on repayments.

AstraZeneca rose 2.8 per cent after its chief executive said the drugmaker’s potential coronavirus vaccine was likely to protect against Covid-19 for about a year.

The mid-cap FTSE 250 index rose 2.2 per cent. Cinema operator Cineworld Group climbed 1 per cent after saying it plans to reopen all its theatres by July, while baker Greggs jumped 5.2 per cent after confirming plans to reopen 800 shops on June 18th.

EUROPE

The pan- European Stoxx 600 index also recorded its best day in a month, rising 2.9 per cent to recover some of the losses of recent sessions when grim economic forecasts and a resurgence in infections in the US and China encouraged investors to play safe.

German and Italian shares outperformed their European peers, with cyclical sectors including travel, construction, banks and autos gaining 3-4 per cent.

Travel and leisure stocks rose 1.7 per cent. German airline Lufthansa was 2.5 per cent higher after saying late on Monday it was seeking agreements with worker representatives by June 22nd on how to make cuts equivalent to 22,000 full-time positions.

NEW YORK

US stocks advanced after a record surge in May retail sales revived hopes of a swift post-pandemic economic rebound.

Retailers Kohl’s and Nordstrom surged 9.4 per cent and 11.8 per cent respectively, and were among the top advancers on the S&P 500 index.

The S&P 500 is now only about 8 per cent below its all-time high hit four months earlier, although the pace of gains have slowed since the Fed issued a grim economic outlook last week.

Industrial giant Caterpillar jumped 5 per cent, while Boeing rose 4 per cent, leading gains on the blue-chip Dow index.