European markets extend year-end rally

European stocks extended their year-end rally in the wake of the Brexit trade deal and as the European Union vaccination programme got under way.

The pan-European Stoxx 600 index rose 0.80 per cent. Wall Street, however, struggled on Tuesday to build on the previous session's record closing highs and crude oil gained ground as investors looked to Washington for signs that an enhanced stimulus package would pass a Senate vote.

"You have government economic assistance coupled with Brexit, which is pushing stocks up in Europe, Britain and the US," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“But you have the $2,000 (€1,600) bonus passing the House and if the Senate doesn’t, they look like Grinches.”

London shares rally as US stimulus and Brexit pact brighten sentiment

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“You have to take these days between the holidays with a grain of salt because there’s limited liquidity,” Mr Tuz added.

The US House of Representatives voted on Monday to meet US president Donald Trump’s demand for $2,000 direct payments to Americans as part of the recently signed fiscal relief bill, sending the measure to the Republican-controlled Senate.

DUBLIN

The Iseq was up 1.3 per cent at 7,552, tracking positive trends elsewhere. The main market mover was Ryanair which was up a further 3.5 per cent at €16.95.

The airline is seen as one of the strongest EU airlines in financial terms and is set to gain most from a widespread vaccination programme and the resumption of short-haul travel.

It said on Tuesday that it would move ahead with plans to treat so-called ordinary or depositary shares as restricted shares if they are owned by non-EU nationals.

This will include British citizens, the airline said. Despite the more upbeat economic outlook, the Iseq's two main financials lost ground. AIB was down nearly 5 per cent at €1.70 while Bank of Ireland was down 1 per cent at €3.39. Permanent TSB went the other way, rising by 6.6 per cent to 87 cent.

Homebuilder Cairn rose 2 per cent to 97 cent while rival Glenveagh rose 0.7 per cent to 86 cent. Construction activity has escaped the new Level 5 restrictions to curb the spread of coronavirus.

The positive vibe across Europe saw package group Smurfit Kappa increase a further 2.25 per cent to €39.10 while insulation specialist Kingspan rose by a similar amount to €59.75.

LONDON

Britain’s blue-chip FTSE 100 index ended at its highest since March on Tuesday as investors returned from a long weekend to cheer a post-Brexit trade deal that averted a chaotic exit from the European Union.

In its first day of trading after the deal, the blue-chip FTSE 100 index gained 1.6 per cent, logging its best day since November 9th. International companies such as Unilever and Diageo gave the biggest boost to the FTSE 100 despite a firmer pound, while drugmakers AstraZeneca and GlaxoSmithKline also added to the gains.

“The deal should see sentiment towards the FTSE indices recover just as the dividend payout ratio improves, vaccines are rolled out and overseas revenues accelerate. We lift UK equities to Bullish,” analysts at brokerage Jefferies wrote in a note.

On individual stocks, shares in Hut Group rose 8.9 per cent after the e-commerce company said it would buy US online retailer Dermstore from Target Corp for $350 million in cash.

EUROPE

Among individual movers in Europe, Deutsche Lufthansa was up 5.6 per cent after the chairman of its Swiss unit said it's able to pay back a government loan and won't need additional borrowings. Germany's Dax index dropped 0.2 per cent after climbing to a high yesterday.

"It remains fascinating whether stock markets can use more momentum or whether they will suffer from potential profit taking, as the end-of-year rally has already pushed many stocks toward new records and some investors could be tempted to take some money of the table," Comdirect Bank strategist Andreas Lipkow said in an email.

NEW YORK

The S&P 500 and the Dow hovered at record levels in choppy trading on Tuesday as bets that fiscal aid will fuel a vaccine-led economic recovery boosted sentiment in the final days of the year.

The tech-heavy Nasdaq, however, retreated as investors locked in profit in some of the market leading names such as Apple and Tesla. Shares of planemaker Boeing added 1 per cent as its 737 MAX plane resumed passenger flights in the United States for the first time after a 20-month safety ban was lifted last month.

Snapchat owner Snap gained 8 per cent after Goldman Sachs raised its price target on the stock on upbeat revenue growth prospects. – Additional reporting Reuters/Bloomberg