European stocks hit one-week high as investors await US election outcome

Banking and auto stocks propelled the European stocks benchmark to a one-week high on Tuesday, while investors anticipated a clear win for Democrat Joe Biden in the US presidential election would lead to more economic stimulus.

DUBLIN

Irish banks helped to boost the Iseq on Tuesday. It closed up 2.8 per cent on the prior day.

Bank of Ireland gained 4.85 per cent while AIB was 6.7 per cent higher. Permanent TSB, which earlier in the day said it booked a further €17 million of loan loss provisions in the three months to the end of September, was up 2.4 per cent.

Construction stocks were also a winner with investors as heavyweight CRH rose 5.4 per cent and Kingspan was up 1.7 per cent.

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Other movers included Glanbia, up 2.5 per cent, Ryanair, which gained 3.3 per cent, and Smurfit Kappa, up 2.6 per cent.

LONDON

London’s FTSE 100 scored its biggest one-day percentage gain in nearly two months on Tuesday, getting a boost from banks on rising bets of more stimulus measures to soften the economic blow from a new wave of coronavirus infections.

The blue-chip index closed up 2.3 per cent as banks jumped 4.7 per cent to their highest in nearly three months. The mid-cap FTSE 250 rose 1.8 per cent, with shares in Crest Nicholson Holdings surging 16.5 per cent after the homebuilder forecast annual profit ahead of market expectations and reinstated its dividend. The wider homebuilding sub-index gained 1.9 per cent.

British office space provider IWG jumped 8.2 per cent after it said it had started seeing some improvement in its sales activity and highlighted increasing interest in flexible working.

G4S rose 3.1 per cent after the private security firm rejected a takeover proposal from US rival Allied Universal Security Services.

EUROPE

The pan-European STOXX 600 closed 2.3 per cent higher – its best day since mid-June. Bourses in Frankfurt and Paris saw similar gains.

A Biden win is widely considered to be supportive for European equities in the near term because of expectations it would mean a bigger stimulus package and better trade ties with the United States.

Banks led gains among European sectors, with French lender BNP Paribas jumping 6.1 per cent as a surge in currency and commodity trading helped it beat quarterly profit estimates.

The Automobiles & Parts sector, which has borne the brunt of the Trump administration's trade war with China, gained 3.5 per cent. Boosting the index, luxury car maker Ferrari surged 7.1 per cent after it forecast 2020 earnings at the top of its previous guidance range as new models start to reach customers.

Among other individual movers, British homebuilder Crest Nicholson surged 16.5 per cent after it reinstated its dividend and said annual earnings would top market expectations. German meal-kit delivery company HelloFresh, which has more than doubled in value this year as lockdowns drove demand, slipped 1.2 per cent after quarterly results.

NEW YORK

US stocks jumped early on Tuesday as investors bet that one of the country’s most divisive presidential races would end with a clear victory for Democratic nominee Joe Biden and a swift deal on more fiscal stimulus.

Arista Networks jumped 18.6 per cent, among the leading gainers on the benchmark S&P 500, after the network gear maker reported a better-than-expected quarterly profit.

PayPal reported better-than-expected quarterly results, boosted by a surge in digital payments. However, its shares dropped 3.1 per cent after more than doubling in value since March.

Industrials Caterpillar and Honeywell International rose about 2 per cent each.

Additional reporting: Reuters