European shares end lower as boost from upbeat earnings fades

European shares ended lower on Wednesday, as Wall Street's retreat from record highs dragged Europe down from an early rise triggered by upbeat earnings reports.

Optimism among investors that this might point to a broader economic rebound ebbed as the session proceeded, as gains in commodity-linked shares and banks were outweighed by losses in most other sectors.

Market-watchers also kept an eye on signs of progress concerning US president Joe Biden’s proposed $1.9 trillion stimulus bill.

DUBLIN

The Iseq slid 1 per cent in line with the negative mood across equity markets as many of its biggest stocks finished in the red.

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Packaging company Smurfit Kappa bucked the trend as it published its full-year results, delivering better than expected earnings as demand for its products surged in the final quarter. The company, which said it planned to increase its final dividend by 8 per cent, closed 2.4 per cent higher at €41.22.

Ryanair lost further ground, shedding 0.6 per cent to €14.98 amid fears of a delay in any meaningful recovery for European air travel. Insulation maker Kingspan, which is one of the companies subject to scrutiny at the ongoing inquiry into the Grenfell Tower disaster in London, fell 4.35 per cent to €52.75.

AIB fell 1.5 per cent to €1.64, while Bank of Ireland added 0.65 per cent to €3.39. Building materials group CRH fell 0.3 per cent to €36.00.

LONDON

The blue-chip FTSE 100 index edged 0.1 per cent lower, while the mid-cap FTSE 250 fell 0.55 per cent.

Mining stocks led gains, with Anglo American closing up 4.75 per cent, Glencore adding 2.7 per cent and Rio Tinto up 2.6 per cent.

But housebuilders were under pressure after the UK government said it would impose a new levy on developers of certain high buildings in England and a UK-wide tax on the residential development sector. Taylor Wimpey fell 4.2 per cent, Berkeley dropped 4.5 per cent and Barratt lost 2.5 per cent.

Persimmon, the UK's biggest homebuilder, fell 2.8 per cent on a day when it said it would pay for work on potentially unsafe buildings in the wake of the cladding scandal arising from the Grenfell fire.

Ocado plunged 7 per cent as downbeat comments from equity analysts weighed on investor sentiment towards the online grocery company's stock.

EUROPE

The pan-European Stoxx 600 index nudged 0.2 per cent lower. Earnings were in focus with Societe Generale leading gains on France's Cac 40 index with its 2.9 per cent jump after beating profit forecasts for the fourth quarter.

The Paris index finished about 0.4 per cent lower, however, as data showed French industrial output came in weaker than expected in December despite the lifting of a coronavirus lockdown.

Studded with luxury names, the index was also weighed on by a 1.4 per cent slide in Louis Vuitton owner LVMH, after music star Rihanna and the company agreed to suspend her fashion line Fenty less than two years after its launch.

At the bottom of the Stoxx 600 was drugmaker Galapagos, which fell almost 19 per cent after the Belgo-Dutch company and US partner Gilead Sciences discontinued late-stage trials studies of their lung disease drug.

Meanwhile, Dutch online payments processor Adyen topped the index, climbing after beating expectations with a 27 per cent rise in full-year core earnings.

In Frankfurt, the Dax closed down 0.6 per cent.

US

Wall Street’s main stock indexes slipped after hitting record highs at the open, with the tech-heavy Nasdaq sliding 0.4 per cent after a streak of gains.

Twitter shares were trading 7.8 per cent higher a day after the company beat estimates for quarterly sales and profit and followed its social media peers to forecast a strong start to 2021.

– Additional reporting: Reuters