Energy stocks boosted by a steady surge in oil prices and a higher open on Wall Street helped European shares erase session losses and close higher on Tuesday, but a sell-off in banks and auto stocks kept gains in check.
The pan-European Stoxx 600 index closed up 0.23 per cent, touching August highs and extending gains to an eighth straight session – its longest winning streak since October 2017. It had fallen as much as 0.3 per cent in the session.
Energy-heavy London’s FTSE 100 led gains in the region, up 0.9 per cent at a more than six-month high, while Germany’s Dax and France’s CAC40 rebounded to close higher.
Wall Street’s rise on upbeat earnings bolstered sentiment, helping them retrace losses. Italy’s MIB slipped nearly 0.3 per cent, while Spain’s IBEX lost 0.6 per cent as banks weighed ahead of earnings.
The oil and gas sector hit a six-month high, up 2 per cent, with Royal Dutch Shell, British Petroleum and Total, up between 1.8 per cent and 2.6 per cent.
DUBLIN
The Iseq snapped a six-day winning streak on Tuesday to close down 0.7 per cent, a shift linked to further negative sentiment around Brexit. Dublin-listed travel retail software provider Datalex, whose shares have slumped in recent months on accounting irregularities, however, was the chief loser, seeing its stock sink a further 19 per cent to 67 cents. This came on the back of news that its shares will be suspended from May 1st as it misses a regulatory deadline to have full-year results published by the end of this month.
Surging oil prices, meanwhile, took a toll on airline stocks with Ryanair trading down nearly 5 per cent at €12.02. Food group Glanbia was up 2.5 per cent at €17.40 ahead of the company's annual general meeting in Kilkenny on Wednesday. Shareholder advisory groups Glass Lewis and Institutional Shareholder Services have advised investors to reject the company's remuneration report, which gives chief executive Siobhan Talbot a 22 per cent pay hike. Elsewhere CRH was down nearly 2 per cent at €19.99.
LONDON
London's main index sprang to a near seven-month high on Tuesday as oil majors leapt on the back of tighter US sanctions on Iran and exporters benefited from a weaker pound as Brexit jitters returned.
The FTSE 100, whose components earn a large chunk of their revenue from outside the UK, jumped 0.9 per cent, with further support from an upbeat Wall Street. Shell rose 2.2 per cent to a six-month high and BP gained 2.6 per cent as oil prices rose in anticipation of tightened supply after the United States said it would end all Iran sanctions exemptions by May.
On the flip-side, airline stocks were bruised by higher oil prices. Easyjet fell 3.9 per cent and Aer Lingus owner IAG shed 3.3 per cent on the main index. Wizz Air lost 2.7 per cent on the mid-cap index.
Also fuelling the main bourse were export-driven stocks which gained after sterling slumped to a two-month low on fading hopes for a Brexit breakthrough in talks between the ruling and opposition parties and as prime minister Theresa May faced growing pressure to quit. GlaxoSmithKline, AstraZeneca, Diageo all helped boost the main index.
EUROPE
Plane maker Airbus's shares hit an all-time high with a management shake-up spreading to its space unit. Rival Boeing is set to report results on Wednesday, while other auto manufacturers such as United Technologies and Lockheed Martin reported solid profits.
Nestle was the biggest boost to the Stoxx 600 benchmark, up 1.4 per cent. Credit Suisse raised the food group's price target by five Swiss francs. Gains on the Stoxx 600 were tempered, however, as earnings started to roll in on a not-so-positive note with Umicore tumbling over 17 per cent, after the Belgian group warned revenue and earnings growth in 2020 will be lower than previous indications.
Umicore's slide weighed heavily on Belgium's blue chip Bel 20 Index, pulling it 1.2 per cent lower to post its biggest one-day drop in a month. Banks and auto stocks weighed the most on the pan-region index.
NEW YORK
The S&P 500 was within striking distance of its all-time high on Tuesday as better-than-expected results from Twitter and a host of industrial companies eased concerns about slowing corporate profits. The benchmark was just 0.4 per cent away from an intra-day record high of 2,490.91 hit on September 21st.
Twitter shares surged 16.6 per cent, touching a near nine-month high, after the social media company posted a better-than-expected quarterly revenue and a surprise rise in monthly active users. Another big gainer was Lockheed Martin, whose shares jumped 6.5 per cent after it reported upbeat quarterly results and lifted its full-year profit forecast on strong demand for its missiles and fighter jets. Amazon. com, set to report results later this week, gained 1.8 per cent, providing the biggest boost to the S&P 500 and the Nasdaq.
– Additional reporting by Reuters
