European markets retreat as vaccine optimism effect dissipates

European markets toppled off highs on Tuesday as fears about the impact of Covid-19 lockdowns took over from optimism prompted by news of further vaccine breakthroughs.

DUBLIN

Property investor Hibernia Real Estate Trust dipped 0.63 per cent to €1.256 after reporting that the value of its assets fell 3.8 per cent in the six months to September 30th, the first half of its financial year. The stock reached a high on Tuesday of €1.288 in mid-morning trade.

Ryanair Holdings shed 2.46 per cent to close at €14.87 on a day when its main rival, Easyjet, reported heavy full-year losses on the back of the Covid-19 pandemic and said capacity would be severely reduced over the three months to the end of 2020.

The Irish airline giant’s stock hit €15.40 early in the day, but traded down for most of Tuesday, reaching a low of €14.785 before clawing back some ground ahead of the close.

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Paddy Power and Betfair owner Flutter Entertainment fell 2.74 per cent to €142.20.

Global building materials giant and index heavyweight CRH was 1.29 per cent off at €33.73. Elsewhere among industrial stocks, multinational packaging maker Smurfit Kappa edged up 0.76 per cent to €37.

Among smaller stocks, AIB shed 2.04 per cent to €1.298. Bank of Ireland inched 0.77 per cent up to €2.63.

Irish lenders came under fire from regulators on Tuesday after inspections found gaps in their procedures for ensuring compliance with the Republic’s fitness and probity regime for key personnel.

LONDON

Airline Easyjet slid 1.93 per cent to 792 pence sterling after reporting full-year losses of £1.2 billion for which it blamed the Covid-19 pandemic. The carrier, a leading rival to Irish giant Ryanair, said that it would operate at just 20 per cent of its capacity in the first quarter of its current financial year, which ends on December 31st.

The news hit travel stocks generally. Aer Lingus, Iberia and British Airways owner International Airlines Group shed 3.34 per cent to close at 153.45p.

Asset manager Intermediate Capital Group surged 7.9 per cent to 1,689p after posting an improved first-half profit.

Tobacco group Imperial Brands surged 7.3 per cent to 1,505.5p after forecasting better profits for 2021.

Home repair services provider HomeServe added 2.4 per cent to 1,267p after it posted a stronger first-half profit and raised its dividend.

SSP Group, owner of bakery chain Upper Crust, which has a franchise in Dublin, tumbled 6.2 per cent to 345.8p after analysts at Morgan Stanley downgraded the stock.

EUROPE

The pan-European Stoxx 600 ended 0.2 per cent down as shares slid through Tuesday, after testing highs not seen since late February on Monday, following positive news about US group Moderna’s Covid vaccine trials.

Market analysts argued that the highs reached on Monday were unsustainable as a surge of virus cases in the US and tough lockdowns in Europe were bound to leave their economic mark.

Banks came under pressure as Spain's BBVA fell 4.4 per cent after it and smaller rival Sabadell said they were in talks to create the country's second-biggest domestic lender by assets. Sabadell jumped 6.8 per cent.

Air France KLM appeared to shrug off competitor Easyjet's poor performance, ending the day unchanged at €4.34, although it traded as high as €4.56 earlier. German aviation group Lufthansa dipped almost 0.6 per cent to €9.83.

US

Wall Street’s main indices fell on Tuesday with the S&P 500 and the Dow retreating from record closing highs hit a day earlier, following disappointing retail sales data and a spike in Covid-19 cases.

The Nasdaq’s losses were limited by a 7.6 per cent jump in Tesla’s shares on news the electric-car maker would join the benchmark S&P 500 in December.

Amazon rose 0.6 per cent after it launched an online pharmacy for delivering prescription medications in the US.

Drug retailer Walgreens Boots Alliance Inc tumbled 9 per cent while CVS Health Corp fell 8 per cent on the news.