Prospect of support for airlines boosts European stocks

Airline stocks led European shares higher on Monday on hopes of state support, while upbeat earnings from Deutsche Bank and others added to optimism fuelled by signs that many countries will soon ease coronavirus-driven lockdown measures.

Meanwhile, UK stocks opened higher as more states prepared to ease stay-at-home orders and investors geared up for one of the busiest weeks of quarterly earnings reports.

Dublin

Irish stocks participated in Monday’s rally, with the Iseq All-Share index closing 1.86 per cent higher.

Index heavyweight CRH provided the biggest boost as the building materials group ended up 4.57 per cent at €27.25. Peers such as Heidelberg Cement also gained as governments around the world prepare to lift lockdowns, prompting the hope that construction projects would restart.

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The airline industry also had a good day on talk of government state aid for some troubled European flag carriers such as Lufthansa and Air France-KLM. Irish budget airline Ryanair ended the day 2.87 per cent higher at €9.89.

Among well traded Iseq stocks, food names were the ones that suffered on the day. Kerry Group dropped 0.67 per cent to €103.10 while Glanbia declined by 0.44 per cent to €9.15.

AIB, too, was an underperformer, falling 1.27 per cent to €0.98. Its decline came amid a broad rally in the banking sector as Germany's Deutsche Bank issued results which exceeded expectations.

London

The blue-chip FTSE 100 closed 1.64 per cent higher on the day while the mid-cap FTSE 250 rose by 1.69 per cent.

Shares in bakery chain Greggs moved higher after it put forward plans to reopen its stores despite the coronavirus lockdown. Shares increased by 47p to 1,773p after it said it hopes to open 700 sites on June 8th.

Elsewhere, equipment rental firm Ashtead was one of the day's best performers after an upbeat coronavirus update impressed traders. The group said it has cut its capital expenditure budget, introduced a hiring freeze, paused the share buyback scheme, and mergers and acquisitions have been suspended.

Holiday Inn owner Intercontinental Hotel Group was also towards the top of the FTSE 100 despite saying that about half of its hotels across Europe and other regions have temporarily closed.

Though oil plummeted on the day, shares in Royal Dutch Shell and BP both nudged higher.

Europe

Shares of Lufthansa jumped 10.5 per cent after Germany's transport minister said he was in favour of protecting the airline company. Air France KLM advanced 0.9 per cent following a €7 billion government aid package.

German shares surged 3 per cent, while the pan-European STOXX 600 closed up 1.8 per cent.

Euro zone banks surged 3.9 per cent as Deutsche Bank beat first-quarter earnings expectations but warned it might miss its capital requirement target this year. The German lender's shares jumped 12.7 per cent.

Drugs and pesticides company Bayer rose 5.8 per cent after its quarterly adjusted core earnings topped estimates.

Milan-listed shares rose 3 per cent after ratings agency S&P Global on Friday left Italy’s credit rating unchanged, calming worries about a potential junk rating for the euro zone’s third largest economy.

Planemaker Airbus was among the biggest drags on the index after it warned 135,000 employees to brace for potentially deeper job cuts and said its survival is at stake without immediate action.

New York

US stock markets jumped more than 1 per cent on Monday as more states prepared to ease stay-at-home orders.

Tesla jumped 9.5 per cent and was the biggest boost to the Nasdaq after a report said the electric-car maker is calling some workers back to its California vehicle-assembly plant next week.

About 173 companies in the S&P 500 are scheduled to report quarterly earnings this week, including Apple, Amazon. com, Microsoft and Boeing.

Caterpillar fell 1 per cent as Morgan Stanley downgraded the heavy equipment maker to "underweight".

– Additional reporting: Reuters