Tariff threats to EU goods do little to curb gains in European share

European shares closed comfortably higher on Tuesday, with utilities and consumer stocks leading gains as investors brushed aside US president Donald Trump’s threat to impose tariffs on an additional $4 billion (€3.5bn) of EU goods.

DUBLIN

The Iseq closed unchanged, with Bank of Ireland and Aryzta dragging the index lower. However, Ryanair was one of the main movers, gaining 3.3 per cent on the back of strong numbers that showed an 8 per cent rise in passengers to 13.6 million last month.

Bank of Ireland, which announced changes at executive level, including the departure of tech transformation guru Steve Collier, was down 2 per cent as AIB closed unchanged.

Swiss-Irish food group Aryzta closed 3 per cent lower, while Flutter, formerly Paddy Power Betfair, closed down 0.90 per cent.

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LONDON

Britain’s main share index scaled a more than 10-month high on Tuesday, driven by gains in internationally exposed stocks that benefited from a weaker sterling.

The FTSE 100, whose components book a major chunk of their revenue from overseas, gained 0.8 per cent and hit its highest level since August 2018. The more domestically-focused mid-cap index, the FTSE 250, edged 0.1 per cent higher, but was subdued as the pound slipped after a survey showed Britain’s construction industry suffered its worst month in more than 10 years in June.

Consumer goods company Reckitt Benckiser and spirits company Diageo were among the biggest boosts to the blue-chip bourse.

Weighing on the mid-cap index was a 29 per cent slide in the shares of Funding Circle after the peer-to-peer lending platform halved its 2019 revenue growth forecast due to weak demand for loans.

Among other moving stocks, insurer Hiscox rose 2.2 per cent and peer Admiral was up 1 per cent after Willis Re said property reinsurance rates increased by up to 25 per cent in the latest renewal round in areas of Florida hit by hurricanes.

EUROPE

The pan-European STOXX 600 index rose 0.4 per cent in muted volumes, adding to its 0.8 per cent rise on Monday after the US and China agreed to return to the negotiating table after a breakdown in trade talks in May.

Europe’s main indexes had a subdued start as investors turned sceptical about a US-China trade deal after President Trump said any agreement would need to be “somewhat tilted” in favour of the US.

Planemaker Airbus closed 0.3 per cent lower as further tariff threats became the latest salvo in a long-running dispute over aircraft subsidies.

Galapagos' shares jumped 5.2 per cent to scale a record high on positive news from its partner Gilead on a rheumatoid arthritis drug. Meanwhile, Jupiter Fund Management dropped 8.5 per cent as investors booed its plan to consider naming Devon Equity as an adviser for its European Opportunities Trust.

WALL STREET

Wall Street’s main indexes were subdued in early trading as a trade truce-fuelled relief rally in the previous session fizzled out after the US threatened additional tariffs on European goods.

Adding to the downbeat mood was a clutch of weak manufacturing data from around the world that rekindled global growth fears.

Among stocks Automatic Data Processing slipped 4 per cent after market sources said brokerage Jefferies is reoffering 8 million of the company's shares at a discount. L3Harris Technologies gained 3.4 per cent, the most on the S&P 500, after Jefferies added the defence contractor to its top picks for aerospace and defence electronics for the second half of 2019.

Nasdaq-listed Irish biotech company Amarin jumped by almost 10 per cent after upgrading its profits forecast on the back of prospects for its drug Vascepa.