Iseq a bright spot as investors mull details of European stimulus

Markets slipped on Friday, with investors in Europe disappointed by the lack of details in a trillion-euro emergency fund and US investors remaining cautious about an economic recovery as some states prepared to relax the coronavirus-induced lockdowns.

DUBLIN

The Iseq All-Share index was a bright spot, , rising by more than 0.6 per cent on Friday, outperforming European peers on the day.

The gain for the index came primarily from rises in heavyweights CRH and Ryanair.

The budget airline outperformed its peers on the day, rising 2.08 per cent to €9.61 as investors take comfort from the companies cash position compared to its rivals.

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The ongoing talk about a return to work for the construction sector also boosted construction materials group CRH. The company rose 0.81 per cent to close the week at €26.06.

Grafton Group, listed in London but headquartered in Dublin, benefited from that news also, rising 6.4 per cent. The company, which has a large UK exposure, is up 20 per cent in the past three days over talk of hardware stores in the UK opening soon.

Other property names also gained, with Cairn Homes 0.37 per cent higher at €0.82, and Glenveagh Properties up 0.55 per cent at €0.549 as their UK peers scope out a return to work.

LONDON

The blue-chip FTSE 100 index ended 1.3 per cent lower, logging a 0.6 per cent decline for the week marred by a historic plunge in oil prices.

Shares of BP and Royal Dutch Shell were down nearly 3 per cent.

Luxury brand Burberry fell 3.6 per cent after saying it would not tap Britain's state furlough scheme and would pay its employees who are unable to work because of store or site closures during the coronavirus crisis.

Education group Pearson dropped 4.1 per cent after it posted a 5 per cent fall in quarterly revenue, and warned of a bigger hit if social distancing measures are prolonged.

In a bright spot were homebuilders after Persimmon said it would restart its construction sites in a phased manner from Monday, making it the third company in the sector this week to announce such a move.

Berkeley, Barratt and Taylor Wimpey gained between 0.4 per cent and 2.5 per cent.

EUROPE

After two days of gains the pan-European Stoxx 600 index closed 1.1 per cent lower.

The travel and leisure sector led losses among major European sectors, down 3.4 per cent, with airline Lufthansa losing 8 per cent. The carrier's chief executive told employees he expected a smaller fleet and 10,000 fewer staff after the coronavirus crisis, a day after it reported a first-quarter loss of €1.2 billion. Several brokerages cut the price target on the stock, with Société Générale double downgrading to "sell".

The European banking index fell 2.9 per cent as S&P cut Commerzbank's credit rating by a notch, and lowered its outlook for Deutsche Bank to negative from stable.

Swiss food giant Nestle and French drugmaker Sanofi were the biggest boosts to the pan-region index after reporting strong first-quarter results on pandemic-induced panic buying of food products as well as pain and fever medicines.

NEW YORK

Boeing fell 5.3 per cent after a report the planemaker was planning to cut 787 Dreamliner output by about half, while Intel shed 2.1 per cent on a weak second-quarter profit forecast and after it said it could not issue a full-year outlook.

The S&P 500 was on course to end a tumultuous week lower, with investors fearful of a deep economic slump following a near crash in April business activity and weekly jobless claims topping 26 million in five weeks.

American Express also fell half a percent after posting a 76 per cent drop in first-quarter profit as the credit card issuer braced for potential losses stemming from the coronavirus outbreak. – Additional reporting: Reuters