Irish banks bouncing back after torrid Covid-19 period

Global markets continued recent recoveries on hopes of demand recovering as governments across the world announced the easing of restrictions introduced to slow the spread of the coronavirus pandemic.

Dublin

Irish banks were the big winners on Euronext Dublin, bouncing back from a torrid few weeks that have hammered almost every stock on the market.

Majority State-owned AIB finished the day up 13 per cent, while Bank of Ireland fared even better, ending the session up more than 15 per cent.

Traders pointed to the European Commission offering banks flexibility in how they calculate and set aside provisions for bad loans as they deal with an expected surge in distressed debt resulting from the Covid-19 crisis.

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“It was seen a sign that banks are going to be vital to spurring the recovery after the crisis has passed,” said one.

In gambling, Paddy Power Betfair parent Flutter continued recent form with a 3 per cent bounce. Traders said its performance could be attributed to the recent approval of its merger with Stars Group, making it the world's biggest online gambling company.

In aviation, airlines "remain a bit choppy", according to traders, with uncertainty still hanging over the long-term future of the industry. Ryanair finished the day down 3 per cent, as one trader speculated it may have been affected by talk of a Lufthansa bailout.

In food, it was a good day for Greencore which rose 7 per cent as traders suggested investors had one eye on the potential easing of lockdown measures and the reopening of businesses.

Elsewhere, C&C closed up 5 per cent despite being down a point earlier in the day. Generally, the market has soared 30 per cent higher since the low point at the onset of the crisis.

London

The UK's FTSE 100 closed at a near seven-week high as hopes that major economies will ease lockdown measures helped investors look past dire quarterly earnings reports from oil major BP and lender HSBC. BP gained 2.6 per cent despite its first-quarter profit tumbling by two-thirds.

The blue-chip index ended 1.9 per cent higher, recovering more than 20 per cent from mid-March lows as massive economic stimulus actions and signs that the coronavirus outbreak was easing drew buyers into equity markets.

Aside from energy stocks, shares in heavyweights British American Tobacco, Prudential, Lloyds Banking Group and Barclays boosted the FTSE 100. Retailer Marks & Spencer rose 3.3 per cent after saying it had taken steps to strengthen its finances for 18 months.

Europe

A rally in banking shares helped European shares end at seven-week highs, with the pan-European Stoxx 600 closing up 1.7 per cent on largely broad-based gains.

A 40 per cent jump in first-quarter profit for UBS, the world's largest wealth manager, and a 4.78 per cent share rise in Spain's Santander despite an 82 per cent slump in quarterly net profit lifted Europe's battered banking sector to its highest point in two weeks.

The healthcare sector was the only one to decline, down 0.1 per cent. Roche Holding, however, gained 0.9 per cent on positive data from its treatment for spinal muscular atrophy.

New York

The S&P 500 and Nasdaq erased early gains as a plunge in consumer confidence underlined the extent of the economic damage from the coronavirus pandemic, while healthcare stocks slumped after a sales warning from Merck.

The US drugmaker fell 3 per cent after saying it expected the outbreak to reduce 2020 sales by more than $2 billion (€1.84bn) as a big drop in doctors’ office visits take a hefty toll. The wider S&P healthcare index shed 1.5 per cent, falling for the first time in five days.

Microsoft and Amazon. com shed more than 1.4 per cent, with investors booking profits heading into the biggest week for first-quarter earnings for tech-related firms, while the banking subindex added 1.9 per cent. (Additional reporting: Agencies)