Kerry Group sparkles in Dublin as European markets advance

European shares advanced on Monday, underpinned by financials, miners and technology stocks, with food giant Kerry Group standing out as a particular bright spot among large Irish companies.

The pan-European Stoxx 600 index gained 0.4 per cent to 381.64, with most markets and most sectors moving ahead.

DUBLIN

The Iseq index increased by 0.7 per cent to 6,922.24.

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Kerry Group was in demand, rising 2.2 per cent to €75.60, as influential Wall Street investment bank Goldman Sachs highlighted the stock’s attractions and reiterated its “buy” rating in a note on the European consumer products industry.

Other Irish food companies were also firmer, with Glanbia gaining 0.9 per cent, while embattled baked goods company Aryzta rose by 2.5 per cent.

Ryanair gained 1.5 per cent to €18.71 as Air France-KLM released buoyant passenger statistics and HSBC highlighted in a note to clients how the European airline industry is consolidating.

Real estate investment trusts were generally on the advance, with Green Reit and Irish Residential Properties Reit each edging 0.8 per cent higher. The attractions of the industry were underpinned by a Sunday Business Post reported over the weekend that the Abu Dhabi Investment Authority is in talks to invest in developer Johnny Ronan's planned redevelopment of office blocks at AIB Bank Centre in Dublin, according to dealers.

Bank of Ireland’s new shares inched 0.3 per cent higher to €7.40 on their first day of trading, helped as Davy upgrading its share price target for the stock to €8.40 from €8.10. Each new stock replaced 30 shares previously held by investors.

Bucking the trend, Permanent TSB lost 1.1 per cent to €2.65, while Paddy Power Betfair traded off 0.9 per cent to €90.75.

LONDON

The blue-chips FTSE 100 index rose by 0.3 per cent to 7,370.03.

Shares in BAE Systems powered ahead after the firm escaped a potential earnings blow when the High Court ruled the UK could continue selling arms to Saudi Arabia.

Two judges in London decided the Secretary of State for International Trade had not acted unlawfully or irrationally in refusing to block export licences for the multi-billion sale and transfer of arms and military equipment.

The British defence giant, which generates more than £3 billion (€3.4 billion) of its revenues from business with the Arab nation, rose 2 per cent.

Outside the main blue chips, UK midcap construction support services company Carillion grabbed traders’ attention after a profit warning and CEO exit sent its shares tumbling nearly 40 per cent in heavy volumes.

EUROPE

Shipping company Moeller-Maersk jumped 4 per cent to a 14-month high and was among top European gainers after Goldman Sachs raised its forecast for it and peer Hapag , on an analysis of shipping rates.

PostNL was up more than 4 per cent after the outgoing Dutch economy minister Henk Kamp suggested that regulatory changes were needed in Dutch postal services.

German utility E.ON rose 2.2 per cent, a top-performer in the buoyant utilities sector after HSBC said recent weakness offered an "excellent buying opportunity", raising the stock to a "buy" from "reduce".

Analysts at UBS said that although relative outperformance of European versus US equities has slowed recently, they saw the region regaining momentum as monetary policy began to tighten.

"Europe craves higher rates and US bond yields," they wrote, pointing to the region's higher weighting in materials, industrials, financials and energy, against US equities' concentration in technology and consumer discretionary sectors more suited to lower rates.

NEW YORK

The Dow Jones Industrial Average rose 0.05 per cent, to 21,424.88. The S&P 500 gained 0.13 per cent, and the Nasdaq Composite added 0.22 per cent.

Investors were wary of making big bets ahead of the start of the earnings season, with big US banks including JPMorgan, Wells Fargo and Citigroup reporting on Friday.

Amazon. com gained ahead of its popular Prime Day shopping festival.

United Health dipped as the US President Donald Trump’s plan to replace Obamacare continued to face obstacles.

Abercrombie & Fitch shares plunged after the teen apparel retailer terminated discussion on a potential deal following a review.

– (Additional reporting: Reuters, Bloomberg)