European markets up as Wall Street takes a holiday for Independence Day

Upbeat euro zone business activity saw European shares reverse session losses on Monday. Trading volumes, however, were subdued, with US markets closed for an extended July 4th weekend.

British mid-caps jumped, led by gains in heavyweight mining stocks, supermarket chain Morrisons, and a surge in travel stocks ahead of England’s plans to ease its lockdown measures.

DUBLIN

Trading volumes were thin but the Iseq still managed to climb 0.9 per cent, far outpacing its euro zone index peers, due to a spillover effect from London where market euphoria over the impending end of lockdown restrictions drove activity.

The pillar banks both performed strongly as traders digested reports that the Irish economy is set for a strong bounce back. Financial stocks were also in vogue across Europe during the session. AIB closed ahead by 2 per cent to €2.30, while Bank of Ireland was up by 2.2 per cent to €4.69.

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Despite the lack of US market activity, Irish shares with large US exposures performed well on the day. Smurfit Kappa Group was ahead by 1.1 per cent to €46.46, while Glanbia, which is highly active in the US market for nutritional supplements, was up by a similar margin to €14.11. Kingspan and CRH were more muted, however, up 0.16 per cent to €42.82, and 0.17 per cent to €82.72 respectively.

Travel stocks were popular in the UK as the government there ponders the end of most restrictions. Ryanair, which would benefit from any resurgence in the UK travel market, was ahead by 2.4 per cent to €16.92. The Irish Ferries owner Irish Continental Group rose 1.8 per cent to €4.58.

LONDON

The blue-chip FTSE 100 index rose 0.6 per cent, led by gains in financial stocks.

The domestically-focused FTSE 250 index rose 1.2 per cent, with base metal miners gaining nearly 1.5 per cent. Travel stocks surged 2.3 per cent on the prospect of a reopening.

Morrisons investors had their first opportunity to react to the news that a bidding war is on the verge of breaking out for the supermarket. Private equity firm Apollo Global Management confirmed on Monday morning it was eyeing a bid for the group, although only Fortress has made a formal offer of £6.3 billion (€7.35bn), which has been accepted by the board. Shares in Morrisons closed up 27.7p, or 11.6 per cent, at 267.5p. Clayton, Dubilier & Rice private equity house was first to announce it was considering a bid a week earlier but the offer was rejected.

Spire Healthcare dropped 2.8 per cent even after Australia's Ramsay Health Care sweetened its buyout offer to about £1.04 billion.

Ladbrokes owner Entain said it was "disappointed" after Australia's Tabcorp opted to split its business in two rather than accept a £2 billion takeover offer. Entain shareholders did not seem to mind, with shares up 58p at 1,855.5p.

Mining and commodities giant Glencore announced a new chairman, Kalidas Madhavpeddi, will replace former BP boss Tony Hayward at the helm. Mr Hayward had been with Glencore for a decade, including eight years as chairman. Shares closed up 5p at 320.15p.

EUROPE

The closure of markets in the US for Independence Day weekend kept a lid on trading volumes in Europe. The German Dax closed up just 0.09 per cent and the French Cac was up 0.22 per cent after having earlier been down by 0.5 per cent due to government warnings of a fourth virus wave due to the Delta variant. Extending gains to a third straight session, the pan-European Stoxx 600 rose 0.3 per cent.

Euro zone businesses expanded activity at the fastest rate in 15 years in June as the easing of more coronavirus restrictions powered the bloc’s dominant service industry, PMIs showed.

Banks , material stocks and travel shares led gains on the day.

– Additional reporting: Reuters, PA