German budget flexibility helps European markets

News that the German government could ditch its balanced-budget rule and take on debt to stave off recession boosted European markets on Friday.

DUBLIN

Signs that Berlin is prepared to change budget tack aided Irish banks, dealers said. AIB rose 5.21 per cent to €2.504 while rival lender Bank of Ireland advanced 6 per cent to €3.32.

“They had been underperforming but both were big out performers today,” one dealer noted.

Ryanair, which began High Court proceedings to stop Irish-based pilots striking next week, was the most-traded stock in Dublin yesterday. Dealers said that some 10 million of its shares changed hands on the Irish market, five times its daily average over the last three months.

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The airline’s shares closed 1.97 per cent down at €8.56, but hit a low of €8.392 in early-afternoon trade.

Global building materials giant and index heavyweight, CRH, rose 1.76 per cent to €28.91.

Multinational packaging group, Smurfit Kappa, added 3.89 per cent to close at €26.74.

LONDON

London’s blue chip FTSE 100 index lagged its peers, closing 0.7 per cent ahead against the 1 per cent rise posed by most European indices.

Struggling car dealer Pendragon continued the sell-off of its US showrooms with the sale of its Chevrolet dealership in Puente Hills, California. Shares fell 0.28 pence sterling to 10.46p.

Renshaw owner Real Good Food said losses before tax widened to £26.09 million in the year to March 31st, compared with £9.08 million in the previous year. Its shares were down 0.5p to 6.75p.

Shares in the London Stock Exchange Group lifted 130p to 6,852p despite a technical hiccup in the morning that halted trade for a period.

The FTSE 100's biggest fallers were miner Fresnillo down 7.6p to 663.6p, Prudential down 14.5p to 1,415.5p, BHP Group down 17.4p to 1,755.2p and United Utilities Group down 7.6p to 781.6p.

Friday’s biggest climbers were ITV, up 3.3p to 106.9p, Sainsbury’s, up 5.4p to 182.5p, St James’s Place, up 25.4p to 940p and Irish box maker, Smurfit Kappa, which is also listed in Dublin, up 62p to 2,434p.

EUROPE

Danish shipping giant AP Moller Maersk surged almost 6 per cent after the company said second-quarter earnings rose $200 million year-on-year to $1.36 billion while revenues were slightly up at $9.62 billion.

The results defied both analysts’ predictions and the impact of US-China trade tensions. AP Moller Maersk shares closed up 5.91 per cent at 7,308 Danish kroner on Friday.

The tech sector rose 1.7 per cent propped up by chipmaker stocks after solid earnings from Nvidia and chip gear maker Applied Materials. AMS, Infineon Tech and STMicroelectronics rose between 1.2 per cent and 2.1 per cent.

Specialty chemicals company IMCD slumped 15 per cent to the bottom of the Stoxx 600, after it reported weaker-than-expected organic sales in the second quarter.

US

US stocks rose on Friday and were on track to end a bruising week on a positive note, bolstered by hopes of more stimulus from central banks to perk up slowing growth.

The three main Wall Street indices extended gains after a report that Germany’s right-left coalition government would be prepared to ditch its balanced budget rule and take on new debt to counter a possible recession.

Computer chip maker Nvidia jumped 6.2 per cent after posting better-than-expected quarterly profit and revenue, lifting the Philadelphia chip index 2.51 per cent.

Applied Materials fell 1.8 per cent after chip gear maker cautioned that recovery in the memory chip market is unlikely before 2020.

General Electric jumped 7.4 per cent as Chief Executive Officer Larry Culp bought nearly $2 million worth of shares a day after the stock recorded its biggest one-day percentage fall in 11 years. – Additional reporting: Reuters