Financials help European shares hit a two-week high

European equities climbed to a two-year high on Tuesday, with financial stocks gaining ground on mounting expectations of a possible US rate hike this year.

The European Banks index rose 1.8 per cent, the top sectoral gainer, helped by a 2.7 - 3.8 per cent rise in share prices of Deutsche Bank, ABN Amro, Natixis and Credit Suisse.

US stocks fell in early trading after stronger-than-expected consumer confidence data stoked worries about the potential rate hike this year.

The ruling that Apple must pay the Irish Government €13 billion in back taxes also impacted sharply on tech shares in the US with the company being the biggest drag on all the major stock indices.

DUBLIN

The Iseq index of leading shares closed marginally lower, down 11.59 points to 6,202.77.

IFG, the UK-focused financial services group, was the biggest faller of the day. The company, which last week reported a 31 per cent surge in adjusted operating profit for the first half of the year, was down nearly 7 per cent to €1.90 as investors reacted to a downgrade from Macquarie. Datalex, which announced its first half results on Tuesday, saw its stock close the day just shy of 1 per cent lower to €3.42 after it reduced its 2016 guidance by about 4 per cent as it seeks to scale the business. CRH was 0.6 per cent lower at €30.35 after its US peer USG Corporation sold a part of its business to ABC Supply.

Total Produce was one of the biggest gainers of the day, up 3.5 per cent to €1.61 after it reported first half revenues that were 10.6 per cent higher.

Elsewhere, Permanent TSB was up by just under 5 per cent to €2.05 after new figures showed mortgage approvals up 17.6 per cent in the year to July.

Other movers of the day included Paddy Power Betfair, down 2 per cent to €107.65, and Bank of Ireland, up 2.5 per cent to 19 cents.

LONDON

London's premier index struggled to make headway as falling copper prices took their toll on the mining giants. The FTSE 100 Index closed 17.26 points lower at 6820.79, as London-listed miners dominated the biggest fallers, with Fresnillo leading the market lower, down 100 pence to 1690 pence.

Copper prices sunk to two-month low during the session and were unable to mount a strong recovery, forcing Anglo American to drop 41 pence to 817.5 pence, and Glencore to slip 7.9 pence to 177.1 pence.

Penneys/ Primark owner Associated British Foods (ABF) was the biggest riser on the top tier after RBC Capital handed the firm a broker upgrade from sector perform to outperform. Shares were up more than 3 per cent to 3051 pence after RBC said ABF's sugar business was benefiting from stronger sugar and euro prices, while Primark held an "attractive international rollout story".

EUROPE

Banks helped the pan-European STOXX 600 to close 0.5 per cent higher, after rising earlier in the session to its highest level since mid-August. Among some sharp movers, Germany's Wirecard jumped 3 per cent after Barclays raised its rating on the stock to "overweight" from "equal weight" and lifted its target price.

Belgian investment holding company Ackermans & Van Haaren dropped 6.6 per cent after reporting a weak set of first-half results.

NEW YORK

US stocks were lower in late morning trading as Apple dragged down technology shares after EU antitrust regulators ordered the company to pay €13 billion in back taxes to the Irish government.

The S&P 500 technology index fell 0.37 per cent, the biggest decline in nearly a week, hurt by a 0.9 per cent drop in Apple. Hershey dropped 10.6 per cent to $99.92 after Mondelez said on Monday it was no longer pursuing an acquisition. Mondelez rose 4.2 per cent and provided the biggest boost to the S&P and the Nasdaq.

Abercrombie & Fitch plunged 20 per cent after the apparel retailer said it no longer expects comparable sales to improve this year.

- Additional reporting: agencies