European markets close lower despite rise in banking shares

European stocks slipped on Friday as investors dumped this year's outperformers, including technology and healthcare stocks, and bid up banking shares after the US Federal Reserve unveiled its new policy framework.

DUBLIN

The Iseq ended the week down 0.5 per cent despite Irish banks benefiting from investor interest in banking shares across Europe. Bank of Ireland closed up 3.5 per cent, with AIB 0.8 per cent higher.

Housebuilders gained on the back of a MyHome.ie/Davy report on prices, with Glenveagh rising 1.4 per cent.

Hotels group Dalata continued its strong run, closing the week up 2.2 per cent.

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Other movers in Dublin included Total Produce, which ended 0.9 per cent higher, Smurfit Kappa, down 1.4 per cent, and insurer FBD, up 1 per cent.

LONDON

The FTSE 100 index closed its second week lower on Friday as traders headed into the long weekend worried about a choppy post-pandemic economic rebound, while Greggs slipped on a report a Covid-19 outbreak had forced it to close its depot in Leeds.

The exporter-heavy FTSE 100 was down 0.6 per cent, also pressured by sterling which touched an eight-month high as the dollar fell in the aftermath of Federal Reserve chairman Jerome Powell’s speech.

Britain’s mid-cap FTSE 250 rose 0.2 per cent, with homebuilders leading gains.

EUROPE

The pan-European STOXX 600 index slipped 0.5 per cent, but still ended the week about 1 per cent higher after signs of progress in Covid-19 treatments and vaccines spurred optimism earlier in the week.

Technology stocks, which have surged about 11 per cent this year, were down 0.8 per cent, and the healthcare index fell 1.1 per cent.

Norwegian Air tumbled 9.5 per cent after the budget carrier said it still needed more cash to weather the Covid-19 pandemic as it reported a deep loss for the first half of 2020.

Italian state-owned bank Monte Dei Paschi di Siena gained 2.7 per cent as it received a conditional green light from the European Central Bank for its bad loan clean-up plan.

Shares in German drugs company Bayer fell 2.7 per cent. It said there were "bumps" in sealing its $11 billion settlement of US lawsuits over its Roundup weed killer after a judge cast doubt on the progress of the agreement.

NEW YORK

The S&P 500 was set to open at a record high on Friday for the fifth straight session as the prospect of super-low interest rates for a prolonged period and bets on a medical solution to the Covid-19 pandemic spurred risk appetite.

United Airlines edged up 3.3 per cent in premarket trading as it prepared for the biggest pilot furloughs of its history a day after announcing the need to cut 21 per cent of jobs this year without further US government aid.

Coca-Cola Co gained 1.2 per cent as it announced plans to nearly halve its operating units and offer voluntary separation to 4,000 workers as the beverage- maker battles a hit to sales from the Covid-19 pandemic.

In the latest sign that technology companies are booming in the pandemic, business software provider Workday jumped 9.9 per cent after raising its annual subscription forecast.

Dell Technologies gained 3.9 per cent after reporting quarterly profit that beat expectations as remote working and online learning boosted demand for its notebooks and software products.

Cosmetics retailer Ulta Beauty was up 13.2 per cent after posting quarterly profit ahead of market expectations.

Shares of Tesla and Apple rose 2.8 per cent and 0.6 per cent ahead of their stock splits that take effect on Monday.

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