European shares closed on Monday at a more than seven-week high as a jump in travel and technology stocks helped outweigh a drag from China-exposed luxury giants.
The benchmark Stoxx 600 index rose 0.3 per cent, extending gains after its third straight weekly rise.
Gains in PaddyPower Betfair-owner Flutter Entertainment and Ryanair, up 4.2 per cent and 3.8 per cent respectively, drove Europe’s travel & leisure stocks to a near three-month high. The index closed up 1.6 per cent.
Investors’ focus will be on Tuesday’s US midterm elections, which will determine control of Congress. Republicans have picked up momentum in polls and betting markets, and analysts expect a split government – with the Republicans winning the House of Representatives and possibly the Senate.
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“It tends to be one boat lifts them all. If the sentiment is positive for the US that tends to lift European stocks as well,” said Giles Coghlan, chief market analyst at HYCM.
DUBLIN
Irish stocks jumped 1.9 per cent, lifted by Ryanair after the airline posted its largest ever first-half after-tax profit, and said it expected to return to pre-Covid annual profit level this year. The budget airline reported that revenue hit €6.62 billion in the six-month period – the first half of its financial year – from €2.15 billion over the same time in 2021. The company’s stock closed up 3.8 per cent.
PaddyPower Betfair-owner Flutter Entertainment was buoyed after an arbitrator reaffirmed Fox Corp has 10 years to exercise its option to acquire an almost one-fifth stake in Flutter-owned betting app FanDuel. Fox has a long-term option to purchase 18.6 per cent of FanDuel and Flutter said the new arbitration ruling means the option will be based on a valuation of the company at $22 billion.
AIB closed up nearly 2 per cent at €3.12 before Minster for Finance Paschal Donohoe announced that a further 5 per cent of the State’s stake in the bank would be sold, a move that is expected to raise about €390 million.
EUROPE
European luxury stocks, including LVMH, Pernod Ricard and Hermes International, dipped between 0.7 per cent and 1.5 per cent. There have been mixed signals about China’s reopening. While health officials in China reiterated their commitment to strict Covid curbs over the weekend, Chinese leaders are considering reopening after nearly three years of tough pandemic restrictions with no set timeline.
The Stoxx 600 index started November on steady footing, aided by a better-than-expected reporting season and hopes that the Federal Reserve will deliver rate hikes in smaller increments.
A survey on Monday showed investor morale in the euro zone improved in November, reflecting hopes that recent warmer temperatures and falling energy prices will prevent gas rationing on the continent this winter.
Among other stocks Telecom Italia jumped 10.7 per cent as top investor Vivendi could start talks with Italy’s new right-wing government on a new plan to create a national broadband company.
UniCredit slipped 1.9 per cent, hit by a report of tensions between European Central Bank supervisors and the Italian bank over its capital distribution plans and presence in Russia.
LONDON
The FTSE dipped as it was impacted by weaker health stocks and caution over global political and economic uncertainty. The easing of China’s zero Covid measures failed to make major inroads into the markets at the start of the week amid continued nervousness about central bank decisions and weaker consumer sentiment in recent weeks. The top index finished the day down 34.85 points, or 0.48 per cent, at 7,299.
“The FTSE 100 has underperformed primarily due to a slide in the healthcare sector after GSK reported disappointing results on its Blenrep blood cancer drug trial which failed to meet its primary endpoint,” said Michael Hewson, chief market analyst at CMC Markets UK. The drugs giant closed down 68.2p at 1,377.4p as it recorded the second disappointing result in a matter of weeks.
NEW YORK
US stocks rose in choppy trading as investors focused on midterm elections and inflation readings later this week. The dollar fell with Treasuries.
The S&P 500 ticked higher amid gains in eight of the 11 industry groups. The tech-heavy Nasdaq 100 also caught bids, while the Dow Jones Industrial Average outperformed, with healthcare names topping the leaderboard.
Facebook parent Meta Platforms advanced on plans for job cuts. Apple fell after a report saying it expected to produce at least 3 million fewer iPhone 14 handsets than originally anticipated this year.
Stocks are poised for a second day of gains ahead of US midterms. Morgan Stanley’s Michael Wilson said polls pointing to Republicans winning at least one chamber of Congress provide a potential catalyst for lower bond yields and higher equity prices. – Additional reporting by Reuters/Bloomberg
