European shares lifted by upbeat blue-chip earnings

European equities staged a sharp recovery after last week’s market carnage and a sluggish Monday session as most sectors rallied and investors turned their attention to the start of earnings reports.

Upbeat earnings from US blue-chip companies pushed Wall Street higher and also lifted European markets, as investors shook off fears of rising US treasury yields and geopolitical tensions.

Dublin

The Iseq index rose more convincingly than in the previous session, adding 2.4 per cent as it joined in the global rebound. The Dublin market was particularly buoyed by a 3.3 per cent recovery for Ryanair, which closed at €11.75, while building materials group CRH added 1.3 per cent to €27.10.

Food group Kerry added 4.7 per cent to €94 on relatively low trading volume. Smurfit Kappa also had a strong day, with the paper and packaging company bouncing 3.6 per cent to €29.56. Bank of Ireland nudged up 0.4 per cent to €6.48, adding to its near 1 per cent gain in Monday's session, while AIB was flat at €5.41.

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Irish Residential Properties Reit and Glenveagh Properties were among the few fallers, dropping 1 per cent to €1.41 and 0.8 per cent to 88 cent respectively.

London

The FTSE 100 missed out on rebound as Brexit optimism and data showing fast-rising wages lifted sterling, acting as a drag for the multinationals and exporters listed on the blue-chip index. It closed up 0.4 per cent, well behind other markets.

British American Tobacco slumped 4.6 per cent and touched a one-year low after warning that revenue from smoking alternatives, including those that use heat-not-burn technology, will fall short of expectations. The company has lost 36.7 per cent of its value in 2018.

Tesco fell 3.4 per cent after Kantar Worldpanel data showed the supermarket had lost UK market share. However, online grocer Ocado shares topped the FTSE 100 with a 5.5 per cent gain after an analyst upgrade.

Bellway rose 2.8 after the British housing developer launched a cost savings programme and reported a more than 14 per cent rise in full-year pretax profit.

Greencore, the Irish food group listed in London, recovered much of Monday's 8.8 per cent plunge, closing up almost 5.8 per cent at 200 pence.

Europe

The pan-European Stoxx Europe 600 index added 1.5 per cent, climbing off a 22-month low hit in the previous session. In Germany, the Dax added 1.4 per cent, while the French Cac 40 rose 1.5 per cent.

The biggest climber was German logistics company Kion, up 9.2 per cent with UBS upgrading its rating to "buy".

Real estate shares rose, led by Inmobiliaria Colonial following the Spanish company's €718 million investment announced late Monday.

French advertising giant Publicis added 2.8 per cent as it was lifted by positive sentiment towards its sector after US rival Omnicom Group's third-quarter profit beat analysts' expectations.

However, Dutch mapping company TomTom fell 16.4 per cent as worries over the loss of a contract with Volvo overshadowed a strong update. Volvo fell 4.3 per cent after the Swedish company warned some truck engines could be exceeding emission limits.

New York

On Wall Street, tech shares led the way a day after a decline in Apple weighed on the Nasdaq, while the healthcare sector rose after earnings reports from Johnson & Johnson and UnitedHealth Group.

Crude futures rose in choppy trading as expectations of higher US shale output and inventories were more than offset by worries over looming US sanctions on Iran and growing tensions with top oil producer Saudi Arabia.

The Dow rose 547.87 points, or 2.17 per cent, to 25,798.42, the S&P 500 gained 59.13 points, or 2.15 per cent, to 2,809.92 and the Nasdaq added 214.75 points, or 2.89 per cent, to 7,645.49.. – Additional reporting: Bloomberg/Reuters