Early new year rally ends for Euro stocks as oil markets rise

European stocks were little changed, as the early new year rally came to a halt. Led down by a dismal trading update from Next, retailers suffered the worst falls in London. Stocks in the housebuilding sector advanced, while Ryanair was the star performer in Dublin.

In oil markets, Brent crude rose 1.3 per cent to around $56.26, as investors cheered reports that Saudi Arabia was set to increase oil prices in February as part of a deal between major producers to tackle the supply glut.

Dublin

The Iseq index climbed 0.85 per cent, boosted by gains for

Ryanair

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. The airline climbed 3.3 per cent to €14.66, after publishing traffic data showing a further three-percentage-point rise in its load factor – the proportion of seats filled – to 94 per cent in December, resulting in customer growth of 20 per cent.

Bank of Ireland, food group Kerry and paper and packaging company Smurfit Kappa were also among the stocks to advance, offsetting a decline of 0.7 per cent for index heavyweight CRH, which finished at €32.34.

Hotels group Dalata was also among the fallers, slipping 1.2 per cent to €4.48, while real estate investment trust stocks Green Reit and Hibernia Reit were down fractionally.

London

The FTSE 100 slipped from its record high, but finished close to it and up 0.17 per cent on the previous day’s close. A rally in housebuilders was offset by a slump for retail stocks as

Next

issued a profit warning.

After delivering what is predicted to be the first of several disappointing updates from the retail sector on Christmas trading, Next slumped 14.4 per cent after it warned of “exceptional” levels of uncertainty in the sector and cut its profit guidance.

Marks & Spencer and Primark owner Associated British Foods dropped 6.1 per cent and 3.7 per cent respectively, while mid-cap Debenhams fell 6.6 per cent.

Housebuilders were on a strong footing, with Barratt Developments, Taylor Wimpey and Persimmon rising between 2.8 per cent and 4.1 per cent, helped by mortgage approvals in November reaching an eight-month high, indicating a post-Brexit recovery. A positive note from analysts at Deutsche Bank also helped the sector.

Overseas investors are buying UK government bonds at the fastest pace on record, figures from the Bank of England showed, suggesting that investors are taking advantage of the slide in sterling.

Europe

Stocks slipped early in the session, but losses were pared in the afternoon, with the result that the Stoxx Europe 600 Index finished the day down 0.1 per cent at the close.

The Euro Stoxx 50 Index also closed little changed, while the French Cac 40 and the German Dax were flat.

Commodity producers were among the worst performers in Europe, after helping to push the benchmark index into a bull market on Tuesday; however, banks advanced again, with the Stoxx 600 Banks Index finishing up 0.6 per cent.

Meanwhile, data from the EU statistics office in Luxembourg showed euro zone inflation accelerated to 1.1 per cent in December at the fastest pace since 2013, suggesting that a debate about the appropriate degree of European Central Bank (ECB) stimulus is about to gather momentum.

US

Stocks on Wall Street rose in early trading as the dollar retreated from a 14-year high amid speculation that the global economy is poised for faster growth.

The Dow Jones Industrial Average resumed its pursuit of 20,000 as US equities advanced for a second day to start the year.

Investors awaited the release of the minutes from the last Federal Reserve policy meeting, which was due at 7pm Greenwich Mean Time.

The S&P 500 consumer discretionary sector rose 1.1 per cent in morning trade, mainly due to gains for automaker stocks. Both General Motors and Ford rose more than 4 per cent after posting positive US sales for the month of December.

– (Additional reporting: Bloomberg / Reuters)