Markets rally on optimism about growth and corporate earnings

European equities joined a global rally, jumping the most since November, on optimism about global economic growth and corporate earnings.

The Stoxx Europe 600 index rose 1.3 per cent to close at a 13-month high as investors sold off government bonds, sending yields higher.

DUBLIN

The Iseq ended the session almost 1 per cent higher, at 6,574.52, with index heavyweight

CRH

Trump takes to Twitter as Dow tops 20,000 on Wall Street

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Not an average day for Dow as it tops 20,000 for first time

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Trump helps CRH shares surge to within whisker of all-time high

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Dow breaks through 20,000 in New York for first time

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closing 2.2 per cent higher at €34.025 having earlier threatened to hit an all-time high as the building materials giant is seen as a key beneficiary of US president Donald Trump’s infrastructure spending plans.

Banking stocks were also in demand, with Bank of Ireland advancing almost 4 per cent to 26.1 per cent, with rising bond yields expected to help the group's margins and ease the pain of its pension deficit, which peaked at €1.45 billion in September.

Hostelworld was also in demand, rising 3.1 per cent to €2.32, after reporting 21 per cent growth in bookings in the second half of 2016. The stock had been heavily sold off in May after it reported weaker-than-expected demand across Europe in the aftermath of the Paris and Brussels terrorist attacks.

Bucking the trend, Aryzta slid 6.4 per cent to €26.675, bringing its total losses over two sessions to 36 per cent, after it issued another profit warning.

LONDON

The FTSE 100 closed 0.2 per cent higher at 7,164.43, with financials among the main gainers.

Among individual movers, Royal Bank of Scotland closed up more than 3 per cent, while Standard Chartered also gained.

Retailer WH Smith finished the biggest riser on the FTSE 250 index after upgrading its full-year profit forecast on the back of another strong performance at its travel unit over the festive period.

However, mining stocks were out of sorts, after a rally in gold lost its shine. Shares in precious metals company Fresnillo dropped 4.2 per cent, while Randgold Resources fell 3.3 per cent and Anglo American came off 1.8 per cent.

EUROPE

Banks and insurers led gains as bond yields climbed and

Banco Santander

reported better-than-estimated quarterly profits. Santander climbed 4 per cent for its biggest rise since early December.

Drug group Novartis added 2.4 per cent after proposing a $5 billion share buyback and saying it is considering separating its embattled eye-care division.

Logitech International, a provider of personal computer and mobile phone accessories,was the biggest gainer among Stoxx 600 shares, surging 16 per cent as its third-quarter sales beat the highest analyst estimates.

NEW YORK

The Dow Jones Industrial Average was the main talking point on Wall Street as it hitting 20,000 for the first time on Wednesday as strong earnings and Trump’s pro-growth initiatives reignited a post-election rally.

Mr Trump has made several business-friendly decisions since taking office on Friday, including signing executive orders to reduce regulatory burden on domestic manufacturers and clearing the way for the construction of two oil pipelines. The S&P 500 and the Nasdaq Composite indexes also hit record highs.

Sentiment was also lifted by better-than-expected fourth-quarter earnings. Of the 104 S&P 500 companies that have reported results so far, nearly 70 per cent have beaten earnings expectations.

On Wednesday Boeing hit a record high of $168.18 on strong earnings, giving the Dow its biggest boost. Goldman Sachs was the second biggest influence on the index, with a 1 per cent gain.

By lunchtime on Wall Street, the Dow was up 0.74 per cent, at 20,060.91, while the S&P 500 was 0.66 per cent higher and the Nasdaq Composite had gained 0.78 per cent.

"Trump has a majority of both houses [of Congress] so the likelihood of things getting done quicker than they usually do is higher," said Mark Spellman, portfolio manager at Alpine Funds."He can fast-track a lot of policies which is typically not the case." – Additional reporting: Bloomberg, Reuters