Geopolitical uncertainty stalls markets

Geopolitical uncertainty and news that a far left candidate is gaining ground in the French presidential election stalled markets yesterday.

Dublin

Ryanair rose 1.35 per cent to €15.34 after positive news from Air France KLM prompted investors to buy airline shares. More than 1.16 million of the low-cost carrier's shares changed hands in Dublin.

Ingredients and convenience foods group Kerry added 0.99 per cent to close at €76.76. Dealers said that the mood of uncertainty sent buyers towards more defensive stocks. Cider maker,C&C rose 1 per cent to €3.80.

Minister for Finance Michael Noonan's announcement that the Government would decide on the public offering of its AIB stake did little for the stock, which dipped 0.5 per cent to €5.025.

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Similarly, a hint from the Minister that Bank of Ireland may not have to remain within the terms of the State's pay cap when it is hiring a new chief executive failed to lift its shares, which were down 0.41 per cent at 24.4 cent.

Building materials giant CRH was more or less flat at €32.70, although a number of its European peers such as Heidelberg were down.

London

Irish-based Tullow Oil climbed 2.96 per cent to 228.96 pence sterling after news of production stoppages in Libya sparked a further surge in crude prices.

Aer Lingus parent, International Consolidated Airlines Group (IAG) rose 0.96 per cent to 528.5p following rival Air France KLM's announcement that passenger numbers rose in March.

British airline Easyjet also benefitted, gaining 1.32 per cent to close at 1,056.76p.

Miner BHP Billiton jumped 5 per cent after hedge fund Elliott Advisors wrote to it proposing a plan to unlock value that involves scrapping its London Stock Exchange listing, demerging its US oil arm and revising its capital return policy.

Shares in Barclays reversed earlier losses to trade 0.4 per cent higher after the bank said that British regulators were investigating its chief executive Jes Staley and the bank itself over the handling of a whistleblowing incident.

Europe

Spain's struggling Banco Popular fell 9.6 per cent after chairman Emilio Saracho said that it would have to follow last year's capital injection of €2.5 billion with a further fund raising.

The lender is trying to deal with €36 billion of bad property loans. Its stock closed at 73 cent. The shares are the worst performers on the European STOXX banking index over the past year, falling almost 60 per cent against a 30 per cent rise in the index.

Overall, European stocks ended a four-day advance, while French shares dropped after recent polls showed far-left candidate Jean-Luc Melenchon gaining momentum.

The Stoxx Europe 600 Index closed unchanged. The CAC 40 slid 0.5 per cent as the polls reignited French election concern across asset classes less than two weeks before the vote. Southern European markets, most sensitive to political risks, were also under pressure with the IBEX 35 Index and the FTSE MIB Index down 0.5 per cent or more.

French bonds fell, widening the yield spread over Germany to the highest since February. First-round support for Melenchon rose by two percentage points to 18 per cent.

German cement maker Heidelberg dipped 0.33 per cent to €87.75. Air France KLM rose 4.03 per cent to €7.23 after reporting a per cent increase in passenger numbers and a boost to cargo traffic in March. The news boosted a number of other aviation stocks.

New York

US stocks reversed course to trade lower on Monday as losses in financial stocks, ahead of quarterly earnings later this week, offset a boost from energy shares.

Straight Path Communications surged nearly twofold to $89.71 after AT&T offered a huge premium to buy the owner of wireless spectrum licenses. Swift Transportation jumped 21.7 per cent to $24.36 after agreeing to a merger with fellow trucking company Knight Transportation. Knight's shares were up 12 per cent. – (Additional reporting, Reuters)