Iseq drops as Flutter shares dive on lowered earnings outlook

The Iseq overall index of Irish shares declined on Tuesday even as the wider European equities market inched to a fresh record high, with Paddy Power owner Flutter Entertainment dragging the Irish market down as it lowered its full-year earnings guidance.

The Iseq declined by 0.9 per cent to 8,540.73, while the pan-European Stoxx 600 index closed 0.1 per cent higher at 479.71 points, as a strong outlook from hearing aid maker Demant supported healthcare stocks, although broader gains were stifled by losses in miners and the prospect of major central bank meetings.

Dublin

Paddy Power, Betfair and Fanduel owner Flutter Entertainment plunged 7.7 per cent to €78 as it cut its full-year profit guidance after gamblers enjoyed a winning streak in October and the company forecast a financial hit from a temporary exit from the Dutch market.

The world’s largest online betting group said it expected full-year adjusted earnings before interest, tax, depreciation and amortisation (ebitda) to come to between £1.24 billion (€1.46 billion) and £1.28 billion compared with the £1.27 billion-£1.37 billion range it had forecast in August.

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European stocks slip after declines for mining companies

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AIB fell by 1.3 per cent to €2.37 as investors edged towards the sidelines ahead of a trading update from the bank on Wednesday morning. Rival Bank of Ireland dipped by 0.3 per cent.

Similarly, Smurfit Kappa declined by 1 per cent ahead of the paper packaging group publishing its latest quarterly report on Wednesday.

London

London’s FTSE 100 index dropped 0.2 per cent, with mining stocks taking a hit from a slump in iron ore prices, while Flutter Entertainment and Asia-focused lender Standard Chartered fell after posting quarterly results.

Miners BHP Group, Rio Tinto and Anglo American were among the worst performers on the FTSE 100 as a tumbling iron ore market weighed on metal prices.

Standard Chartered forecast flat full-year income and dashed investor share buyback hopes, and its shares fell 8.4 per cent even though it reported that third-quarter profit doubled.

Supply-chain problems and rising inflationary pressures have led the FTSE 100 to underperform its European and US peers that are trading near record levels.

Investors are on edge ahead of the Bank of England’s interest rate decision on Thursday, with many expecting the central bank to raise rates for the first time since the pandemic.

Europe

About 166 companies of the Stoxx 600 have reported quarterly earnings so far and 65.7 per cent have topped profit estimates, according to Refinitiv IBES data. In a typical quarter, 52 per cent beat estimates.

Among individual stocks, German meal-kit delivery firm HelloFresh surged 17.3 per cent after raising its sales forecast for 2021.

German dialysis specialist Fresenius Medical Group also gained 1 per cent after reporting an earnings beat and firming up its full-year outlook.

France's CAC 40 index climbed to its first record close since the dotcom era, helped by booming demand for luxury goods and a rebound in energy and banking stocks. LVMH, Hermes International and Kering account for about a quarter of the CAC's 25 per cent advance in 2021, while a surge in oil prices boosted energy stock TotalEnergies SE, making it the second-largest contributor overall after LVMH.

New York

Wall Street’s main indexes climbed to record highs by early afternoon trading, getting a boost from a string of encouraging earnings reports, while investors anticipated the US Federal Reserve’s next meeting where policymakers are expected to announce the withdrawal of pandemic-era stimulus.

Shares of Under Armour jumped after the athletic apparel maker raised its annual revenue and profit forecasts.

Arista Networks surged to scale a new peak as brokerages raised their price targets on the cloud infrastructure supplier's stock following strong third-quarter results.

Mega-cap technology names Apple, Microsoft and Google owner Alphabet rose to help offset declines in shares of Tesla. – Additional reporting: Reuters