Markets

European stocks edge lower but travel stocks hit record highs

Vaccination optimism offset by UBS disclosure of Archegos losses

The pan-European Stoxx 600 index slipped 0.1%. Photograph: Daniel Roland/AFP via Getty

Tue Apr 27 2021 - 18:10

European stocks ended a shade lower on Tuesday as optimism over strong UK earnings was offset by UBS disclosing a hit from dealing with US investment firm Archegos, while travel stocks hit record highs on hopes of a post-Covid rebound.

Markets were caught in a tight trading range as investors watched for any clues on the timing of the Fed’s eventual policy tightening, which the bank has said will depend on employment and inflation levels.

DUBLIN

The Iseq nudged up 0.1 per cent after mixed performances by its key stocks. It was another good session for Ryanair, which added 1.4 per cent to €16.57 amid Europe-wide gains for travel companies, spurred by investor optimism about the vaccine rollout.

Bank of Ireland rose 2.6 per cent to €4.67, but AIB declined 0.4 per cent to €2.49, while building materials group CRH, the largest stock on the index, also fell 0.4 per cent to €39.37.

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Paddy Power and Betfair owner Flutter Entertainment extended its upward trajectory from last week and Monday with a 1.1 per cent rise, taking it to €180.10.

But Cairn Homes and Glenveagh Properties both gave up the gains of the previous session. Cairn fell 3 per cent to €1.08, while Glenveagh finished 2.1 per cent lower at about 94 cent.

Packaging group Smurfit Kappa also slipped, closing at €40.25, down 1.4 per cent.

LONDON

London’s Ftse 100 dropped as export-heavy companies took a hit from a perky pound, overshadowing a rise in bank shares.

The blue-chip index shed 0.3 per cent, with industrial software company Aveva Group's 5.4 per cent slump leading declines on the index after its chief executive said he was stepping down. The mid-cap Ftse 250 ended 0.6 per cent lower.

Losses were limited by HSBC Holdings' 4.2 per cent jump after it beat quarterly profit forecasts and released $400 million it had set aside to cover bad loans caused by the pandemic.

Oil major BP's first-quarter profit more than tripled from a year earlier, and the company said it intended to resume share buybacks in the third quarter. Its shares, however, slipped 0.4 per cent. Its peer Royal Dutch Shell also fell ahead of its results on Thursday.

EUROPE

The pan-European Stoxx 600 index slipped 0.1 per cent, with investors holding off big bets ahead of the US Federal Reserve’s policy decision on Wednesday. German stocks fell 0.3 per cent, while French stocks were flat.

European travel stocks surged 3 per cent to close at a record high. Bank stocks also ended higher on upbeat earnings, as well as support from increasing euro zone bond yields.

However, Swiss bank UBS fell 2 per cent to a two-month closing low as it took an unexpected $774 million hit from Archegos, overshadowing a 14 per cent rise in quarterly net profit.

Sweden's Evolution Gaming Group jumped 14.5 per cent as it reported a 150 per cent jump in quarterly core earnings as the Covid-19 pandemic boosted demand for online casino games.

Danish freight forwarder DSV Panalpina surged 6.8 per cent after it agreed to buy the logistics division of Kuwait's Agility Public Warehousing Co in a deal worth $4.1 billion.

US

On Wall Street, equities wavered around all-time highs as technology shares weakened ahead of a batch of earnings reports from industry heavyweights. The S&P 500 was little changed near a record high, with declines in Tesla, Microsoft and Alphabet weighing down the index.

The tech-heavy Nasdaq 100 traded lower, while 3M contributed the most to a decline in the Dow Jones after it warned that rising costs for raw materials and transportation was a worsening threat.

Microsoft and Google parent Alphabet were due to report after the close of trading. With much of the earnings optimism already factored in to stock valuations, investors may be waiting for stronger beats to fan the next move higher.

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