European equities enjoy upbeat session

European equities enjoyed an upbeat session on Wednesday, with technology companies and car manufacturers leading stocks to a four-week high, amid encouraging earnings announcements from Volkswagen and SAP.

On Wall Street, the Dow Jones and the S&P 500 hit fresh highs, as Microsoft’s strong results reinforced optimism.

Dublin

The Iseq climbed 1.2 per cent in line with the more positive sentiment across Europe. Bank of Ireland rose almost 4 per cent (to 19 cent), while building materials group CRH rose 0.8 per cent to €26.55. Ryanair, the second biggest stock on the Iseq index after CRH, finished up 1.1 per cent at €11.65.

Agri-food group Origin Enterprises climbed 6.7 per cent to €5.55, while there were gains for drinks company C&C, which finished up 3.1 per cent at €3.62, and paper and packaging group Smurfit Kappa, which closed up 1.2 per cent at €21.60.

The Hibernia real estate investment trust (Reit), which publishes an interim management statement next week, advanced 1.5 per cent to €1.39, while the Green Reit was up 1 per cent at €1.48.

London

The FTSE 100 index climbed to its highest closing level in 11 months, boosted by a rise in insurance stocks, although a slump in Anglo American pushed down the mining sector.

The blue-chip index ended up 0.5 per cent, its best closing level since August 2015, although it underperformed other major European markets.

Insurance company Admiral rose 2.8 per cent after analyst at UBS upgraded the stock to "buy" from "neutral". This also helped to lift shares in rival Legal & General by 3.1 per cent.

Healthcare stocks Shire and Hikma also gained ground. Traders said the healthcare sector remained in favour for its "defensive" characteristics of solid profits and dividends, given general uncertainty over Britain's vote last month to quit the European Union.

Mining stocks underperformed, with Anglo American falling 4.8 per cent after reporting a setback in its iron ore production. The FTSE 350 Mining index dropped 2.4 per cent, marking its fourth straight session of losses.

Budget airline Wizz Air said it would halve its growth plans as a result of the Brexit referendum result and the plunge in the value of sterling, putting pressure on travel sector stocks.

Europe

The Stoxx Europe 600 Index added 1 per cent at the close of trading in London. In Frankfurt, the Dax index advanced 1.6 per cent, while in Paris, the Cac 40 index closed up almost 1.2 per cent.

Software maker SAP climbed 5.7 per cent after reporting second-quarter results that beat analyst projections. ASML Holding advanced 3 per cent after Europe’s largest semiconductor-equipment maker said sales increased.

Volkswagen jumped 6 per cent after saying first-half earnings exceeded estimates.

Among other companies moving on corporate news, Nordea Bank added 3.5 per cent as its operating income rose. Lonza Group jumped 5.8 per cent as the Swiss developer of drug ingredients raised its annual guidance.

Finnish industrial-engine maker Wartsila lost 5.4 per cent after posting operating profit that missed projections.

US

Wall Street stocks rose on Wednesday, with the Dow and the S&P 500 hitting fresh records. Microsoft surged 6.9 per cent to $56.75, providing the biggest boost to the three major indexes, after its results beat expectations thanks to strong growth in its cloud business.

The technology index rose 1.46 per cent to its highest level since 2000, with Cisco rising 2.2 per cent in early trade.

Morgan Stanley was up 2.2 per cent at $28.83 after its profit topped analysts’ estimates, rounding off upbeat results from the six biggest Wall Street banks.

Six of the 10 major S&P sectors were higher, with the defensive sectors - utilities, consumer staples and telecoms - down 0.3 to 0.5 per cent. These defensive sectors have powered the stock market’s record-setting rally so far and now investors are keeping a sharp eye on corporate earnings to see if other sectors can help sustain the momentum.

One of the notable drags on the market was Disney, down 1.3 per cent at $98.21 after analysts at Stifel downgraded the stock.

Intel, eBay and American Express were all scheduled to report results after the closing bell.

(Additional reporting: Bloomberg/Reuters)