European shares climb as oil prices rise

European shares climbed to a three-month high as oil rose to more than $40 a barrel, and a number of corporate results for the first quarter beat projections.

The Iseq in Dublin joined in the fun, rising 0.8 per cent to 6,921.44 to recover from straight sessions of losses.

DUBLIN

Kerry Group

stood out as a strong spot, rising 2.3 per cent to €84.05 after French food company

Danone

reported first-quarter results, showing a 3.5 per cent increase in like-for-like sales, which was slightly better than analysts’ expectations.

Banking stocks were also well bid, with Bank of Ireland advancing 2.1 per cent to 24.5 cents, having threatened to fall to its lowest level in almost two years on Monday. Permanent TSB gained 1.9 per cent to €2.68.

Shares in property real-estate investment trusts were also active. Investec analysts said demand for Irish property assets will remain buoyant this year, fuelled by retail assets on the back of growing consumer spending. Green REIT gained 0.2 per cent to €1.41 and Hibernia REIT rose 0.2 per cent to €1.29. Irish housebuilder Cairn Homes gained 0.4 per cent to €1.16 in London after its chief executive, Michael Stanley, said the company's focus now is on developing sites, having spent the early period since its stock market flotation last year on accumulating sites.

LONDON

Tullow

oil added 5 per cent, leading gains in energy-related stocks in London, as crude prices rose for the first time in five days.

Mining stocks such as Anglo American, Antofagasta and Glencore advanced 7.5 per cent to 8.5 per cent, on economic signals coming from China, the leading global consumer of metals. Rio Tinto rose 2.8 per cent even though it cut its 2017 production guidance from its Australian iron ore mines. Associated British Foods increased 2 per cent after reporting earnings that beat analyst estimates as improved results from its sugar business offset a decline in profit at its Primark discount retail chain.

EUROPE

The Stoxx Europe 600 Index jumped 1.5 per cent as a measure of energy shares snapped a two-day decline, tracking oil higher.

L'Oreal rallied 4.8 per cent as it said it would outperform the market in 2016 after first-quarter sales rose more than expected. Danone rose 3.9 per cent after posting better-than-estimated first-quarter revenue growth.

Swiss pharmaceuticals company Roche Holdings added 1.7 per cent after reporting higher quarterly sales.

But it wasn't all good news on the corporate earnings front. Zalando, Europe's biggest online fashion retailer, lost 3.1 per cent after the German company's revenue missed analysts' projections.

NEW YORK

The mood was mixed in mid-afternoon trading on Wall Street. The Standard and Poor’s 500 Index slipped almost 0.1 per cent to 2,093, while the Dow Jones Industrial Average was little changed at 18,003.44, after rising almost 100 points. The Nasdaq Composite Index slid 0.8 per cent.

Netflix tumbled 11 per cent, the most since August, after its forecast indicated weakening subscriber growth in the second quarter. International Business Machines Corp retreated 6.2 per cent, the biggest drop since January, as its second-quarter profit estimate was short of projections. Philip Morris lost 1.3 percent after the cigarette and tobacco group's earnings fell short of estimates. Bucking the trend, Johnson & Johnson rose 2.7 per cent to an all-time high of $113.95 after it beat quarterly earnings forecasts.

Goldman Sachs, the worst performer in the Dow Jones Industrial Average this year, climbed 1.5 per cent after offsetting a plunge in first-quarter revenue by cutting costs deeper than analysts predicted and vowing to do more if needed.

(Additional reporting: Bloomberg/Reuters)