Markets welcome US jobs growth but Dublin trading subdued

A strong jobs report out of the US boosted European shares on Friday after a sluggish start to trading, while US tariffs on steel and aluminium hit steelmakers. The US jobs data showed the country recorded its biggest increase in more than 18 months in February, but a slowdown in wage gains pointed to only a gradual increase in inflation this year, which dampened the possibility of the Federal Reserve increasing rates faster.

Despite the news being welcomed on international markets, in Dublin the Iseq ended the week flat, where results for INM and drops by financial stocks left the market subdued. There was better news in the UK, where figures on US jobs growth eased investor nerves.

DUBLIN

The Iseq closed flat on Friday at 6,744 on foot of a thin volume of trading. Independent News & Media (INM) traded down nearly 2 per cent to 10 cent after the media group reported a 32 per cent drop in profits for 2017 with advertising, circulation and distribution revenues all declining.

In line with other European financials, AIB fell 2.5 per cent to €5.06, while rival Bank of Ireland fared better, falling just 0.4 per cent to €7.25.

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Ahead of results on Monday, Swiss-Irish food group Aryzta fell 2.2 per cent to €19.73, but its shares were up in Zurich where it holds its main listing.

Following positive results last week, hotel group Dalata climbed a further 1.5 per cent to close the day at €6.40.

Smurfit-Kappa, which has had a rollercoaster week following an unsolicited €8.6 billion takeover approach from US firm International Paper, traded flat at €36.

LONDON

The UK’s blue chip FTSE benchmark index ended the session 0.3 per cent higher at 7,224.51 points, while mid-caps gained 0.6 per cent as investors digested a number of earnings updates.

Among individual movers, the biggest FTSE gainer was NMC Health, which briefly touched a record high following a well-received trading update. The UAE healthcare provider reported a 38.2 per cent rise in annual net profit on Wednesday, and said acquisitions this year could top the $641 million it spent in 2017.

Renewi fell 4.3 per cent after the waste-to-product company said it would take an impairment charge following the review of contracts in its UK municipal division.

GVC Holdings rose 5 per cent after the online gambling firm saw full-year net gaming revenue rise 17 per cent in 2017, helped by gains from the bwin.party businesses it bought three years ago. GVC is set to take over Britain's largest bookmaker Ladbrokes Coral.

BAE Systems rose 2.2 per cent, helped by the finalisation of talks between Britain and Saudi Arabia on a multi-billion pound order for 48 Typhoon aircraft made by the defence contractor.

EUROPE

The strong jobs report out of the US boosted European shares. The pan-European STOXX 600 was up 0.4 per cent by the close. Interest-rate sensitive high dividend-paying stocks such as Unilever, Nestle and British American Tobacco were among the top boosts to the STOXX 600.

While the basic resources sector was the best-performing, steelmakers were notable laggards: Voestalpine, Outokumpu and Arcelormittal fell 0.6 to 1.5 per cent after the new US tariffs.

Industrials stocks, which had been the worst hit by fears of an international trade war, were the biggest boost to the index as the worst-case scenario was averted by Trump accepting exemptions to the steel and aluminium tariff.

Airbus gained 1.3 per cent, while oil services stocks also rose as crude prices gained on signs of a detente between the US and North Korea. TechnipFMC rose 4.4 per cent to the top of the CAC 40, while Wood Group rose 3.8 per cent. A number of corporate updates were badly received by investors, however. Shares in Lagardere, the French media group behind Paris Match and Europe 1 radio, suffered the biggest decline on the Stoxx, down 7.3 per cent after disappointing annual results. French energy services and electrical engineering company Spie lost 5.5 per cent after its margin outlook for 2018 disappointed investors.

Lufthansa shares fell 5.7 per cent after the airline reported February passenger data. The stock had its worst day in four weeks after the passenger yield came in lower than expected.

Germany’s DAX was a laggard, down 0.1 per cent after the country’s industrial output fell unexpectedly for the second month in a row.

US

In early trading the Dow Jones industrial average was up 327.75 points, or 1.32 per cent; the S&P 500 gained 34.78 points, or 1.27 per cent. The Nasdaq Composite was up 98.82 points, or 1.33 per cent, at 7,526.76. The index touched a record high of 7,531.47.

While the Dow is up 8 per cent from the February lows, it remains about 5 per cent off record highs seen in January. The S&P is about 3 per cent off its January record highs, but up more than 9 per cent from last month’s lows.

Yet the bull run appears poised to set the record as the longest in history, buoyed by global economic growth and stronger company earnings. Friday's gains were broad-based, with Microsoft and Apple giving the biggest boost to the S&P and Nasdaq.

Among bigger movers, toymakers Hasbro and Mattel were lower after sources told Reuters that retailer Toys 'R' Us is preparing for a potential liquidation.

Tesla fell 1.2 per cent following the exit of its chief accounting officer and a Morgan Stanley note on rising competition. Goldman Sachs Group shares were up 1 per cent after the Wall Street Journal reported Lloyd Blankfein is preparing to step down as the bank's chief executive as soon as the end of the year.

– Additional reporting: Reuters/Bloomberg