Surge in optimism over Italian budget buoys European markets
In Dublin, the Iseq trails European peers with 0.4% drop, Smurfit Kappa falling 2%
Smurfit Kappa fell more than 2 per cent to €34.20. Photograph: Luke MacGregor/Bloomberg
European shares closed higher on Tuesday boosted by gains among oil stocks and optimism over the Italian budget.
The Ftse 100 in London climbed to a three-week high, topped by soaring Next shares and buoyed by the oil majors as crude prices rallied.
The three main US stock indexes were little changed.
The Iseq trailed its European peers, falling almost 0.4 per cent.
Tullow Oil, which maintains its main listing in London, rose 2.75 per cent on the Dublin exchange to close at €2.91. The stock was buoyed by a surge in crude prices.
Ryanair fell almost 0.7 per cent to close the session at €13. It was down as much as 2 per cent before rallying somewhat in the afternoon. The airline announced yet more industrial unrest on Tuesday, cancelling 190 flights for Friday due to a cabin crew strike.
Smurfit Kappa fell more than 2 per cent to €34.20 after it decided to carve its Venezuelan plant, which has been seized by the government there, off its balance sheet, taking a €60 million writedown.
Retailer Next was the biggest riser, as the company raised its profit outlook after a better-than-expected first half. Shares climbed 7.7 per cent, despite the high-street brand having also outlined the Brexit risks facing the business.
Imperial Brands shares were up 22.5p at 2,632p after the Davidoff and Lambert & Butler maker said annual sales of vaping and smoking alternatives were on track to reach up to £1.5 billion by 2020. The tobacco giant said so-called next generation products will also begin to add to its group profit by the end of its 2018-19 financial year.
Irn-Bru maker AG Barr fell 3p to 727p despite reporting a 4 per cent rise in pre-tax profits for the first half of the year as well as a 5.5 per cent lift in sales.
Hotel Chocolat rose 6p to 343.5p on news of a 13 per cent rise in pre-tax profits to £12.7 million and plans for the chocolatier’s launch in the US and Japan.
Across Europe, the French Cac 40 was up just 0.05 per cent while the German Dax rose nearly 0.2 per cent.
Signs that Italy’s coalition was likely to reach a compromise over the 2019 budget lifted Italian stocks and bonds with the country’s top Ftse MIB equity index up around 1.5 per cent, outperforming the broader market.
Italian banks, which are sensitive to political risk due to their big sovereign bond holdings, rose 1.5 per cent. Growing expectations of a rate hike in the euro zone next year helped lifted the European banks sector up 0.7 per cent.
State-controlled Italian defence contractor Leonardo rose more than 3 per cent after it won a helicopter order from the US Air Force.
Elsewhere, heavyweight drugmaker Novartis rose 1.7 per cent after saying it would cut about 2,200 jobs in Switzerland to help boost profitability.
Energy stocks jumped 0.77 per cent as Brent oil hit a four-year high, boosted by imminent US sanctions on Iranian exports, and Opec and Russia’s reluctance to raise output.
The utilities sector slid 1.06 per cent, the most among the 11 major S&P sectors.
CenturyLink tumbled 8.1 per cent after chief financial officer Sunit Patel left the company in a surprise move to join T-Mobile to oversee its integration with Sprint, both of which were little changed on the day. – Additional reporting: Reuters/PA