Soundings from China boost global markets

Global markets continued to respond to positive developments in China. In the US, stocks struggled to add to their second best rally of the year, even as global equities from Japan to Europe surged on optimism governments in Asia will be able to stabilise financial markets.

Emerging-market stocks surged and European shares headed for the longest winning streak since before China devalued its currency.

DUBLIN

A busy day’s trading on the Iseq was all about two stocks:

Ryanair

and

Dala

ta

. The index closed up 1.8 per cent.

Shares in Ryanair had soared by as much as 10 per cent to €14.27 in early trading after it raised its full-year net profit guidance by 25 per cent. At the close that surge had fallen back to a near 5 per cent gain.

Hotel group Dalata was the centre of attention, after announcing it was to raise €160 million in additional equity to fund further hotel purchases. It had pre-tax profits of €2.7 million for the six months to the end of June in a further boost to its share price. The group closed at €4.17, a gain of 3.5 per cent for the day.

Paddy Power shed 2.17 per cent to close at €96.45, giving up some of the gains made last week on foot of its merger announcement with Betfair.

Green Reit fell 1.43 per cent after it said on Monday Dublin's office market risked oversupply from 2018.

LONDON

Britain’s top stock index rallied for a third straight session, boosted by encouraging corporate news from mining companies and financial firms and gains in Asian markets. They generally ignored a report that British manufacturing output fell in July since it makes an interest rate increase by the Bank of England less likely.

The FTSE 100 index was up 1.4 per cent at its close, still around 12.6 per cent off April’s record high, after uncertainty over China’s growth roiled markets in August.

The FTSE 350 mining sector index was up 3.5 per cent, extending the previous session's rise of 2.6 per cent. Anglo American jumped 5.5 per cent, one of the biggest gains on the FTSE 100. Hargreaves Lansdown was the top performer, rising almost 7 per cent after reporting a surge in full-year assets, despite forecast-lagging profit and revenue.

EUROPE

European shares climbed for a third session to a two-week high with miners tracking a rally in metal prices on expectations that the world’s top consumer, China, would take further steps to boost its economy.

The market was also helped by a nearly 5 per cent jump in Ryanair after the airline hiked its annual profit forecast. The European travel and leisure index rose 1.8 per cent.

The STOXX Europe 600 Basic Resources index surged about 3 per cent, boosted by a rally of between 2.9 per cent and 5.5 per cent in shares of Anglo American, Rio Tinto, BHP Billiton and Glencore.

The FTSEurofirst 300 index of top European shares ended 1.4 per cent higher, the highest level since late August. The benchmark index has jumped about 10 per cent since hitting an eight-month low last month.

GlaxoSmithKline was among a few stocks in negative territory. Shares in the drug maker fell 1.2 per cent after GSK and its partner Theravance said their inhaled medicine Breo failed to prolong the lives of patients with chronic respiratory disease.

NEW YORK

Stocks fluctuated after the Standard and Poor’s 500 Index briefly erased last week’s losses as an early rally sparked by gains in Japan and China faded.

Advances among banks and commodity shares were offset by declines in health-care and semiconductor companies.

Copper producer Freeport-McMoRan rose 3.4 per cent to lead raw-materials higher. Netflix jumped 6.3 per cent, poised to snap a seven-day losing streak.

Investors remain confident the Federal Reserve will raise borrowing costs this year.

(Additional reporting, Reuters, Bloomberg)