European shares steady after bank stocks offset slump

European shares steadied at the close of the session on Thursday, with investor interest in pharmaceutical and banking stocks offsetting a slump in stocks that posted disappointing earnings updates.

Dublin

The Iseq index closed down 0.7 per cent, as its biggest stocks fell. Ryanair gave up the ground it gained during the previous day’s session, dropping 1.5 per cent to €12.52, while building materials group CRH dropped 0.7 per cent to €29.70.

C&C closed down 2.5 per cent at €3.50, after the drinks group said it was seeing some volatility in consumer behaviour as a result of heightened economic uncertainty following the Brexit vote and weakening of sterling.

Insurance group FBD fell 3.1 per cent to €6.20, while insulation manufacturer Kingspan dropped 4.1 per cent to €21.67, compounding a 2.7 per cent fall on Wednesday. The company faces a squeeze in the supply of a component for one of its products.

The Green Real Estate Investment Trust (Reit) and Hibernia Reit were also among the fallers, while Paddy Power and Smurfit Kappa also slid. Bank of Ireland rose 2.7 per cent, closing at 19 cent, on a good day for banks across Europe.

London

The FTSE 100 index rose in a choppy session, buoyed by well-received results from Barclays, though mid-cap stocks fell as earnings updates led to double-digit slides for AMEC Foster Wheeler and Berendsen.

The blue-chip index was up 0.4 per cent by the close, while the more domestically-focused FTSE 250 slipped 0.5 per cent.

Barclays was the top riser on FTSE 100, up 4.8 per cent after its third quarter results beat forecasts. The lender posted a rise in third quarter profits to £1.7 billion pounds, helped by an improvement in its investment bank division.

Lloyds initially fell as the UK government restarted its scheme to sell its stake in the bank, but it closed 2.9 per cent higher.

However, oil services firm Amec Foster Wheeler slumped more than 20 per cent, posting its worst day in almost a year after cancelling its capital markets day and posting weak sales figures. Commercial laundry company Berendsen tumbled nearly 16 per cent on a profit warning.

Europe

The pan-European STOXX 600 index ended flat in percentage terms after moving in and out of positive territory several times during the day, with healthcare stocks leading sectoral gainers as they recovered from recent losses.

Swiss engineer ABB fell 6.6 per cent as its orders slipped for the sixth quarter with no imminent rise in orders forecast, while Finnish telecoms equipment group Nokia dropped 7.6 per cent after reporting a sharp drop in third-quarter earnings.

Franco-Italian chipmaker STMicroelectronics jumped more than 10 per cent as the company said it expected improved profitability in 2016 after strong demand for smartphones helped boost third-quarter sales and profits.

Buyers circled financial stocks. Sentiment was propped up by a reassuring update from German lender Deutsche Bank, up 0.6 per cent.

Spain’s BBVA rose 2.8 per cent after posting a higher-than-expected rise in third-quarter profit, surprising markets by reaching its capital target a year ahead of schedule.

Pharmaceutical stocks also gathered momentum. Fresenius shares rose 2.1 per cent after the German healthcare group said that cost cuts, business overhauls and the launch of generic drugs benefited the company.

US

Wall Street edged back into positive territory as healthcare stocks outdid a drag on the market from stocks that depend on consumers’ discretionary spending.

The S&P 500 healthcare index rose 1.15 per cent, on track for its best day in six weeks, as drugmakers Bristol-Myers and Celgene rose on strong results.

The S&P’s real estate index fell 2.4 per cent mainly due to a 2.9 per cent fall in Simon Property.

Pay-television giant Comcast remained the top drag on the S&P 500 and the Nasdaq, falling 2.3 per cent after analysts at Barclays and Deutsche Bank cut their price targets and cited increased competition from AT&T-owned DirecTV Now.

Google parent Alphabet was down 0.4 per cent, while Amazon rose 0.3 per cent, ahead of the reporting of their quarterly earnings after the close of US markets.

Tesla gained 1.2 per cent after the electric carmaker reported its first quarterly net profit in more than three years.

– (Additional reporting: Reuters.)