European shares edge higher after Italian banks make gains

European shares inched up to touch 12-week highs on Wednesday, fuelled by strong gains in Italian banks and tech stocks, while Ubisoft sank following a revenue warning from US videogame-maker Electronic Arts.

However, the FTSE 100 ended a six-day winning streak, as international heavyweights were pressured by a stronger pound and Ocado slumped after a fire at its flagship distribution centre.

DUBLIN

The Iseq closed up 1.2 per cent on a day in which the biggest story concerned its biggest stock, the building materials company CRH, after activist investor Cevian Capital told Reuters it had built up a stake in the company.

CRH gained as much as 5 per cent in early trading, but closed off its session highs at €26.78, up 2.3 per cent.

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Bank of Ireland fell 0.9 per cent to €5.37 despite a positive mood for bank stocks across Europe, but Ryanair added to its Tuesday gain, climbing 1.1 per cent to €11.58, and paper and packaging group Smurfit Kappa advanced 1.6 per cent to €26.20.

LONDON

The FTSE 100 edged 0.1 per cent lower. Online retailer Ocado shed 6.3 per cent after it said a fire at its automated distribution centre in Andover could hit sales growth.

BP, which had led the main index higher with a more than 5 per cent gain on Tuesday after strong results, advanced 1.4 per cent as oil majors reversed course to gain on the day, despite lower crude prices.

GlaxoSmithKline rose 1.6 per cent as strong sales of its new shingles vaccine boosted fourth-quarter results and it forecast 2019 profit to decline less than the market view.

Britain's biggest housebuilder Barratt rose 3 per cent after it posted higher first-half volumes and, in relation to Brexit, said it was working with suppliers to ensure continuity of supply of overseas components.

EUROPE

Europe’s Stoxx 600 managed a 0.2 per cent gain by the close, having oscillated in and out of negative territory during the day. The regional benchmark hid wide variations at country level: Germany’s trade-sensitive Dax was down 0.4 per cent and France’s Cac 40 fell 0.1 per cent while Italy’s FTSE MIB jumped 0.8 per cent.

Bank stocks, which began the day as a drag on the market, reversed course to rise thanks to a rally in Italian lenders after a new 30-year Italian bond drew record demand, a positive sign for government bonds. Intesa Sanpaolo and Unicredit climbed 2.4 and 4.4 per cent.

Strong results from Dutch lender ING also helped lift the mood in bank stocks. ING shares climbed 6.1 per cent after it reported stronger-than-expected earnings driven by rising interest income and fees.

BNP Paribas shares recovered after weak results, ending the day up 1.8 per cent.

Alstom shares climbed 4.1 per cent after Brussels rejected the French rail manufacturer's plan to merge with Siemens' rail division, as investors said the decision removed uncertainty and opened the way for potential alternative deals.

A standout faller was French gaming firm Ubisoft, which sank 9.5 per cent after US videogame maker Electronic Arts cut its revenue outlook.

US

Wall Street dipped on Wednesday as disappointing forecasts from videogame makers pulled the communications sector lower, but a boost from technology companies kept the main indexes near two-month highs.

Electronic Arts slid 13.2 per cent, while Take-Two Interactive Software fell 10.5 per cent. Activision Blizzard also fell 9.1 per cent.

Apple supplier Skyworks Solutions jumped 12.6 per cent after announcing a $2 billion buyback, while Microchip Technology rose 7.6 per cent after its quarterly profit beat estimates.

On Tuesday, president Donald Trump offered no specific economic policy initiatives in his state of the union address and reiterated his vow to build a wall along the US-Mexico border, raising the prospect of another federal government shutdown. – Additional reporting: Reuters/Bloomberg