European stocks close at all-time highs as investors stay optimistic

European stocks closed at all-time highs on Friday as optimism about the earnings season and the European Central Bank’s pledge of continued monetary support outweighed risks of a resurgence in Covid-19 cases.

Friday’s upward momentum contributed to the Stoxx 600’s best weekly performance since early May, with automotive manufacturing companies leading gains.

Dublin

The Iseq rose 1 per cent for its fourth consecutive gain as banks and several key stocks advanced. Permanent TSB's shares soared more than 16 per cent to €1.42 after it confirmed plans to acquire €7.6 billion in loans and 25 branches from Ulster Bank.

AIB, which was reported to be in talks to buy Ulster Bank's low-profit tracker mortgage portfolio, rose 5.9 per cent to just under €2.01, while Bank of Ireland climbed 3.4 per cent to €4.25.

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Building materials group CRH closed 1 per cent higher at €41.45 and it was also a good session for packaging company Smurfit Kappa, which added 1.2 per cent to €47.07, and food group Kerry, which finished up 1.8 per cent at €124.40.

But Ryanair slipped 0.4 per cent to €15.79 and Paddy Power owner Flutter Entertainment also edged down, closing 0.2 per cent lower at €151.00.

London

The FTSE 100 index ended 0.9 per cent higher, led by gains in consumer staples and a jump in Vodafone shares on strong results.

The mobile operator jumped 2.4 per cent and was among the largest gainers on the blue-chip index after it reported a better-than-expected 3.3 per cent rise in first-quarter service revenue.

Aiding sentiment was a jump in British retail sales in June, which sent shares of retail stocks up by nearly 1 per cent.

Dollar-earning consumer staples stocks, including Unilever, Reckitt Benckiser, British American Tobacco and Diageo were among top gainers on weaker pound.

The FTSE 250 mid-cap index rose 0.9 per cent on strong earnings updates from insurer Beazley, while Ultra Electronics was the top gainer after it received a takeover bid from aerospace manufacturer Cobham.

NatWest rose 2.5 per cent after it agreed to sell assets from its Irish arm to Permanent TSB.

Europe

The pan-European Stoxx 600 index rallied 1.1 per cent to a record high of 461.75, sealing a 1.5 per cent weekly rise as upbeat earnings spurred advances for stocks.

Mercedes-Benz maker Daimler gained 5.5 per cent after analysts at Kepler Cheuvreux upgraded its stock to "buy", saying its growth is not properly reflected in the share price.

French car parts maker Valeo jumped 6 per cent after it posted higher first-half sales and profit, and said it expected the shortage of key technology chips to ease. Its peers Faurecia and Continental rose more than 3 per cent each.

A bout of selling hit financial markets on Monday as investors grew nervous about the fast-spreading Delta variant of Covid-19 hampering a global economic recovery. However, strong earnings reports and the ECB’s commitment keep interest rates at record lows for even longer pushed the benchmark higher every day since then.

US

Wall Street rose on Friday after a rocky week in which investors fretted over rising Covid-19 cases, spurred by the more contagious Delta variant, while oil prices slipped after a strong recovery from Monday’s slide.

Megacap tech stocks helped drive main US indexes up again, with the S&P 500 and the Nasdaq 100 indices hitting record highs.

Twitter gained 4.2 per cent in early trading after it reported quarterly revenue growth, while Snapchat owner Snap surged 22.5 per cent on beating estimates for user growth and revenue. Strong results from the social-media firms set a positive precedent for Facebook, which jumped 6.7 per cent.

Intel slid 5.8 per cent after it gave an annual sales forecast that implied a weak end of the year. – Additional reporting: Reuters