European stocks inch up on dovish Fed speech

European shares inched up on Thursday as dovish comments from Federal Reserve chairman Jerome Powell helped offset uncertainty over a possible escalation in the trade dispute between the United States and China.

Wall Street was on track for a difficult day, although the worst of the morning losses had been clawed back by the mid-point.

Dublin

The Iseq rose 0.5 per cent in line with the more positive performance across Europe. But it was a bad session for fruit distributor Total Produce, which fell 7.5 per cent to €1.55 after it lowered earnings-per-share guidance for this year and next, citing "extended unusual weather conditions".

Ryanair fell 2.2 per cent to €11.60, although there was no major stock-specific news, other than an agreement announced in the afternoon on union recognition with Portuguese cabin crew. Paper and packaging group Smurfit Kappa declined 2.9 per cent to €23.82.

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It was a better day for CRH, which rose 1.8 per cent to €24.75, as its US peers in the building materials sector led the way up. Irish Continental ended 2.8 per cent higher at €4.73 despite saying its income was down in the first 10 months of the year. It indicated that the delayed WB Yeats ferry would be ready for delivery next month.

Permanent TSB climbed 8.7 per cent to €1.72 after it confirmed that €1.3 billion of problem mortgages will be refinanced. Bank of Ireland added 3.9 per cent, closing at €5.82.

London

The FTSE 100 added 0.5 per cent, with gains for mining stocks and commodities helping the blue-chip index into positive territory. Antofagasta, Anglo American and Fresnillo all ended higher.

Banks made moderate moves, from HSBC ending flat to Lloyds falling 0.3 per cent, after all seven lenders passed this year’s Bank of England stress tests.

Mid-cap Intu Properties sank 40 per cent after deputy chairman John Whittaker abandoned a plan to buy the British shopping centre group. This reignited worries about the outlook for the battered sector and Intu’s rival Hammerson fell 7.5 per cent.

Unilever shares were flat after the consumer goods giant announced the departure of boss Paul Polman.

Meanwhile, Royal Mail is set to lose its place in the FTSE 100, while insurer Hiscox is likely to join Britain's top stock index in a reshuffle next week.

Europe

The Stoxx 600 rose as much as 0.8 per cent. The pan-European index later pared gains to close up 0.2 per cent as Wall Street fell at the open, giving back part of the rally triggered in the previous session by Mr Powell’s comments.

In Frankfurt, the Dax nudged up 0.2 per cent, while in Paris, the Cac 40 added about 0.9 per cent.

Deutsche Bank fell 3.4 per cent after German prosecutors said police raided six of its offices in and around Frankfurt over money laundering allegations linked to the "Panama Papers". Deutsche Bank said it was co-operating with authorities.

Shares in Elekta fell sharply at the open after the Swedish radiation therapy gear maker reported an unexpected drop in operating profit, but its shares recovered and ended up 4.5 per cent.

US

Wall Street stocks pared losses after a tumultuous morning session focused on trade and interest rates. Energy producers buoyed indexes as crude oil prices rebounded.

The S&P 500 Index reversed almost all of an earlier loss, with healthcare firms pacing the advance, while tech shares led declines. Twitter was down 7.7 per cent at about lunchtime in New York, with Microsoft trading 1.55 per cent lower, Apple down 1.5 per cent, Amazon down almost 1 per cent and Netflix down 2.1 per cent.

Financial stocks also retreated as the dovish tone from the Federal Reserve sent the 10-year Treasury yield to the lowest level in two months.

– Additional reporting: Reuters/Bloomberg