Strong earnings results boost European shares

CRH drives 2% rise on Iseq as banks edge up

Strong earnings results boosted European shares on Wednesday despite fears about the impact of Russia's renewed attack on Ukraine.

Dublin

Building materials giant and index heavyweight CRH surged 5.84 per cent to €38.625 after predicting that sales and profits would continue growing this year.

A trading statement noted that revenue was up 15 per cent with all divisions performing strongly.

Its shares sparked a 2 per cent rise in the Iseq index of Irish shares, which outperformed most others in Europe on Wednesday.

Insulation specialist Kingspan rose 3.85 per cent to €88.94. Dealers said building stocks were shaking off investors' fears about inflation's impact on the industry.

AIB climbed 6.38 per cent to €2.05. Traders said there was no news driving the shares' growth and noted that its peer, Bank of Ireland, only edged up 0.26 per cent to €6.258. "It's unusual to have such a separation between the two," said one dealer.

Ryanair shed 0.9 per cent to €14.525. Traders noted the airline faces possible strikes in Belgium this weekend.

Packaging group Smurfit Kappa added 2.44 per cent to €39.44 on a good day for its industry generally.

London

Irish DIY group and builders' merchant Grafton Group climbed 1.8 per cent to 1,016 pence sterling on a good day for construction-linked stocks. Dealers suggested that some inflation fears were easing while Irish giant CRH reported strong results.

Woodies DIY owner Grafton is listed solely in London. The group earns much of its revenue from Britain and Europe.

Packager and Smurfit Kappa rival Mondi gained 2 per cent to 1,472p as that industry also proved popular with investors.

GlaxoSmithKline fell 1.1 per cent to close at 1,740.8p as hundreds of workers voted to strike against the drugmaker's pay raise saying it was well below the rate of inflation.

Miners were collectively down 2.6 per cent as Rio Tinto fell 4.8 per cent to 5,850p after reporting lower iron ore shipments in the first quarter and warning of risks from inflation, China's pandemic-related lockdowns and the Ukraine war.

Just Eat Takeaway added 2.1 per cent to 2,217.5p after saying it is in talks for a possible sale of its US arm Grubhub and reported quarterly results.

Europe

Danone jumped 5.8 per cent to €55.66 after the French food group posted stronger quarterly sales growth and maintained its 2022 targets.

Brewer Heineken rose 5.2 per cent to €93.94 on a sharper rise in quarterly beer sales, allowing the Dutch giant to stick to its 2022 forecast.

The Stoxx 600 has declined more than 5 per cent so far this year, with tech stocks losing 20 per cent. Commodity-linked stocks surged by the same measure on rising prices.

Profits for European companies are expected to have grown by 25 per cent in the three months to end-March, a much lower pace compared with the 60-150 per cent rates of 2021 with outlook for the rest of 2022 being the big question for investors as inflation surges to record highs.

Data on Wednesday showed German producer prices rose 30.9 per cent on the year in March, reflecting the effects of the Ukraine conflict.

Credit Suisse slipped 1.7 per cent to 7.17 francs after the Swiss bank said it expects a first-quarter net loss and higher negative impacts from Russia's invasion of Ukraine.

France's CAC 40 gained 1.4 per cent ahead of a key debate between presidential candidates Emmanuel Macron and Marine Le Pen before Sunday's run-off vote. Polls predict a Macron win.

US

The tech-heavy Nasdaq fell on Wednesday as streaming giant Netflix slumped after shedding subscribers for the first time in a decade, stoking worries among investors about their bets on high-growth companies set to report results. Netflix plunged 36.6 per cent and was set for its worst day since October 2004 as it blamed inflation, the Ukraine war and fierce competition for the subscriber loss and predicted deeper losses ahead.

Megacap stocks including Amazon. com, Tesla and Meta Platforms fell between 2.3 per cent and 5.3 per cent, while streaming peers Walt Disney, Roku and Warner Bros Discovery dropped between 4.5 per cent and 8.3 per cent. – Additional reporting: Reuters