Iseq higher but European shares sluggish on trade war concerns

European shares were sluggish on Wednesday as a batch of poor corporate updates added to worries about a global growth slowdown and China-US trade negotiations.

DUBLIN

The Iseq outperformed many of its European peers on Wednesday, led by the banking sector, with peer banks closing strongly after a Davy report indicating they have started the year in positive territory.

The Dublin market ended 1 per cent higher at 5828.38.

AIB jumped 4.4 per cent to €4.13 after Davy upgraded the bank to "outperform". Bank of Ireland was up 2.7 per cent to €5.69, while Permanent TSB bucked the trend, declining 1.7 per cent to €157.

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Iseq heavyweight CRH was down following publication of US construction data. It closed down 1.47 per cent to €24.88. European and US peers Buzzi and Cemex were also lower.

Ryanair had a strong start to the day as it continued to rebound after losing ground last week on the back of a profit warning. The airline, which was up almost 4 per cent on Tuesday following a positive trading statement from rival EasyJet, closed 1 per cent higher to €10.99.

LONDON

UK shares slipped on Wednesday as fresh worries about global economic growth weighed on oil stocks while a stronger pound also pulled down multinational stocks, with Metro Bank losing over a third of its value after missing profit forecasts.

The FTSE 100 fell by 0.9 per cent as sterling climbed to a 10-week high, effectively bringing down the value of the US revenues of blue-chip exporters.

Oil majors BP and Shell tumbled as crude prices flirted with negative territory in choppy trading. Multinationals Reckitt Benckiser, British American Tobacco and GlaxoSmithKline also fell as sterling firmed.

Mid-cap Metro Bank tanked nearly 40 per cent, knocking more than £800 million (€918 million) off its market value, after it announced a sharp rise in exposure to higher-risk mortgages and said profits would be hit by slowing growth.

Sanne Group, which provides alternative asset and corporate administration services, tumbled more than 17 per cent – its steepest intra-day fall on record – after announcing the departure of its chief executive and a trading update.

Luxury brand Burberry erased early losses to add 2.9 per cent despite weak Christmas sales data.

EUROPE

The Stoxx 600 ended down 0.1 per cent, having wavered in and out of negative territory throughout the session. After a broadly negative start the index turned higher to rise as much as 0.4 per cent before paring gains again.

A profit warning by Ingenico sent the French payment group down more than 13 per cent to six-year lows. ASML Holding, a major supplier to the world's largest computer chipmakers, fell as much as 4.8 per cent after it said sales would be weak in the first quarter as some of its customers had delayed orders into the second half of the year. Its shares, which hit their lowest level since September 2017 earlier this month, recovered to end up 0.9 per cent.

NEW YORK

The S&P 500 and the Nasdaq reversed course to dip slightly early on Wednesday due to losses in healthcare and financial sectors, while the Dow stayed afloat on positive earnings reports from IBM, United Technologies and Procter & Gamble.

The blue-chip index was buoyed by IBM, which jumped as much as 10 per cent after projecting 2019 profit above expectations. Gains in shares of IBM also lifted the S&P technology sector, which rose 0.10 per cent.

United Technologies jumped 3.48 per cent after reporting a better-than-expected quarterly profit while Procter & Gamble’s quarterly revenue also beat Wall Street expectation. Its shares rose 4.20 per cent.

One of the biggest decliners in early trading was Kimberly-Clark, which fell 2.62 per cent after its quarterly profit missed analysts' estimates due to rising raw materials costs and a strong dollar. – Additional reporting: Reuters