European shares flat as falling consumer confidence dents optimism

European shares ended flat yesterday, after a jump in US weekly jobless claims and falling euro-zone consumer confidence put a dampener on economic recovery hopes, erasing earlier gains made on strong regional earnings reports

The dollar slipped to an almost two-year low and gold rose further as a gauge of global equities retreated on concerns about a potential inquiry of Apple, which knocked the wind out of the high-flying tech sector.

DUBLIN

The Iseq All-Share index gained 0.12 per cent on the day, broadly in line with its European peers.

Standout movers were those that stood to gain from the Government's July stimulus package, a plan worth €7 billion designed to reboot economic activity in the State.

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House builders rose after the package extended the help-to-buy scheme by entitling home buyers using the programme to tax relief of up to €30,000, an increase of €10,000. Cairn Homes improved 4.91 per cent to €0.92 while Glenveagh Properties gained 3.32 per cent to close at €0.75. Hibernia Reit was an outlier among property names after it fell 3.1 per cent to €1.12.

Dalata, the State's largest hotel group, gained 2.23 per cent to finish the day at €2.75 after the Government confirmed a "staycation subsidy" to allow people who spend €625 to claim back an income tax credit worth €125.

Banks were weaker on the day, giving up gains after strong performances earlier in the week on agreement in Brussels on the EU stimulus plans. AIB slipped 2.24 per cent to €1.22 while Bank of Ireland declined 0.22 per cent to €1.83.

LONDON

The blue-chip Ftse 100 index ended up 0.1 per cent, kept above negative territory by a 7.9 per cent jump in Anglo-Dutch consumer behemoth Unilever after its second-quarter sales fell much less than expected.

Software maker Sage Group and miner Polymetal International were among the best performing blue-chip stocks after they both posted stronger earnings.

The mid-cap Ftse 250 rose 0.1 per cent, boosted by security contractor G4S after it reported a higher-than-expected first-half operating profit. Russian gold miner Petropavlovsk topped the midcap index after marking strong production over the first half.

EUROPE

The pan-European Stoxx 600 index gave up gains of as much as 0.8 per cent, with the travel and leisure sector – worst hit by pandemic containment measures – falling 1.1 per cent. The index has lost more than 36 per cent this year with a recovery from March lows plateauing.

Losses in the main index were capped by a 2.1 per cent surge in car makers after Germany's Daimler forecast a rise in operating profit at its Mercedes-Benz cars and vans division in 2020 as sales rebound.

Publicis Groupe, the world's third-biggest advertising company, surged 8 per cent after it beat market expectations for underlying sales.

NEW YORK

Wall Street dropped sharply as investors fled market-leading tech shares due to mixed earnings reports and growing signs of a worsening pandemic, which could exacerbate a deep recession.

The sell-off steepened after a tech watchdog group reported that Apple faces consumer protection investigations in multiple states.

The bellwether S&P 500 slid more than 1 per cent, snapping a four-day winning streak with its biggest daily percentage drop since June 26th. All three major US stock averages lost ground, with falling momentum stocks Apple, Microsoft and Amazon weighing heaviest. Apple ended the session down 4.6 per cent.

The Dow fell 353.51 points, or 1.31 per cent, to 26,652.33, the S&P 500 lost 40.36 points, or 1.23 per cent, to 3,235.66 and the Nasdaq dropped 244.71 points, or 2.29 per cent, to 10,461.42. – Additional reporting: Reuters