Euro­pean shares make mod­est gains

Banks and pharma stocks among the ris­ers, but Iseq un­der­per­forms Fi­nan­cials pro­vided the big­gest boost to the Ftse, with bank­ing shares ris­ing 1%

The Irish Times - Business - - MARKETS - LAURA SLAT­TERY

Euro­pean shares made only mod­est gains yes­ter­day as a global rally that fol­lowed the US midterm elec­tions faded, although strong re­sults from a num­ber of stocks soothed con­cerns about cor­po­rate earn­ings.

Wall Street stocks opened on the de­fen­sive while the dol­lar strength­ened ahead of a mon­e­tary pol­icy an­nounce­ment by the Fed­eral Re­serve.

DUBLIN

The Iseq in­dex fell 0.8 per cent, un­der­per­form­ing the ma­jor Euro­pean mar­kets, but the drop was de­scribed as “an anom­aly” by one trader due to the volatil­ity in the share price of Aryzta, which is con­duct­ing a rights is­sue to raise cap­i­tal. The Swiss-Ir­ish bak­ery group slumped 18 per cent to €1.23 on its sec­ondary Dublin list­ing. Build­ing ma­te­ri­als group CRH, the largest com­po­nent of the Iseq, also posed a drag on the over­all in­dex, drop­ping 1.7 per cent to €26, while Paddy Power Bet­fair fell 1 per cent to €77.30. Per­ma­nent TSB gained ground in early trad­ing af­ter an up­date in which it high­lighted growth in new mort­gage lend­ing, though the stock fin­ished flat at €1.92. Ryanair didn’t sus­tain its Wed­nes­day gain, slip­ping 0.2 per cent to €12.86. The air­line has made progress in re­solv­ing dis­putes with cabin crews.

LON­DON

A strong earn­ings up­date from phar­ma­ceu­ti­cal com­pany As­traZeneca helped the Ftse 100 bench­mark in­dex to a gain of 0.3 per cent. It rose 4 per cent af­ter strong de­mand for its new drugs – es­pe­cially those for can­cer – drove a re­turn to sales growth in the third quar­ter and the drug­maker said it now an­tic­i­pated years of sus­tained im­prove­ment.

Hikma ral­lied 5.6 per cent af­ter rais­ing full-year rev­enue ex­pec­ta­tions for its key in­jecta­bles di­vi­sion. Hikma is sup­ply­ing in­creased opi­oid painkillers amid a short­age in the US.

Coca-Cola HBC rose 5.1 per cent to the top of the Ftse 100 af­ter the soft-drink bot­tler re­ported slightly higher-than-ex­pected quar­terly rev­enue growth, driven by higher vol­umes.

Fi­nan­cials pro­vided the big­gest boost to the Ftse, with shares in Lloyds, HSBC and Royal Bank of Scot­land all ris­ing more than 1 per cent.

EUROPE

The pan-Euro­pean Stoxx 600 was up just 0.2 per cent by the close. The Ger­man Dax was down 0.45 per cent and the French Cac 40 slipped 0.1 per cent.

Shares in Italy’s third-largest lender, Banco BPM, jumped as much as 8.9 per cent, then pared gains to close 2.6 per cent higher, af­ter its third-quar­ter net profit beat fore­casts.

Com­merzbank and SocGen were up 5.2 per cent and 2.4 per cent re­spec­tively af­ter solid earn­ings up­dates. Ger­man con­struc­tion ma­te­ri­als firm Wiener­berger also rose af­ter re­sults, top­ping the Stoxx with a 6.3 per cent gain. French cater­ing gi­ant Sodexo added 5.1 per cent af­ter it an­nounced bet­ter-than-ex­pected rev­enue fig­ures. Ger­man en­gi­neer­ing com­pany Siemens rose 0.8 per cent af­ter it said it ex­pects to notch up “mod­er­ate” sales growth next year.

US

The S&P 500 and Nas­daq closed slightly lower af­ter a Fed­eral Re­serve state­ment, and en­ergy stocks were the big­gest drag on the S&P as US crude oil prices fell. The US cen­tral bank said af­ter its two-day meet­ing that strong job gains and house­hold spend­ing were keep­ing the econ­omy on track but busi­ness in­vest­ment “mod­er­ated from its rapid pace ear­lier in the year,” cre­at­ing a pos­si­ble drag on fu­ture growth.

Aside from the com­ment about busi­ness in­vest­ments, the Fed state­ment was largely as ex­pected and sug­gested that the Fed’s next rate hike would be in De­cem­ber. But some in­vestors had hoped for a change in tone af­ter Oc­to­ber’s mar­ket sell-off. The Dow Jones In­dus­trial Av­er­age rose 10.92 points, or 0.04 per cent, to 26,191.22, the S&P 500 lost 7.06 points, or 0.25 per cent, to 2,806.83 and the Nas­daq Com­pos­ite dropped 39.87 points, or 0.53 per cent, to 7,530.89. – Ad­di­tional re­port­ing: Reuters, Bloomberg

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