Markets

Stock markets bounce back after torrid Thursday

Equities boosted by economic data and hopes that trade tensions will ease

Wall Street bounced back on unexpectedly strong US job numbers. Photograph: Reuters

Fri Jan 4 2019 - 18:15

European stocks made gains on Friday, as investors were buoyed by good news on the US economy, interest rates and trade tensions. Equity markets put Thursday’s Apple-triggered slide behind them and advanced across the board.

Sentiment was boosted by news of a new round of talks between China and the US, raising hopes of a resolution to a market-shaking trade spat.

Dublin

The Iseq advanced 3.2 per cent, in line with the strong performance across Europe.

Amid strong US economic news, building materials group CRH climbed almost 5.2 per cent to €24.07, while paper and packaging group Smurfit Kappa also outperformed, rising 5.7 per cent to €24.44.

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Dalata Hotel Group was another company to post a rise of more than 5 per cent, closing up 5.7 per cent at €5.04, with the stock more than recovering Thursday's loss.

The main company news came from Glenveagh Properties, which released a trading statement for the full-year 2018 that indicated it was on track to beat previous expectations on volumes, revenues and profit. The homebuilder, which also said it had acquired a €25 million site in Co Cork from Nama, soared 8.1 per cent to more than 78 cent.

Another housebuilder, Cairn Homes, finished up 4.2 per cent at €1.14.

London

The FTSE 100 closed almost 2.2 per cent higher, as the potential easing of tariff threats between Washington and Beijing boosted stocks with exposure to Asia. Luxury goods maker Burberry gained 4.6 per cent, while Standard Chartered and HSBC rose 3.6 per cent and 2.35 per cent respectively.

Whitbread shares rose 2.1 per cent after Barclays raised its rating and said the restaurant and hotel owner was its preferred hotel pick, while J Sainsbury fell 1.1 per cent after an analyst downgrade and Tesco also retreated 1 per cent amid low expectations for supermarket retailers ahead of next week's flurry of trading updates.

Mondi finished 5.8 per cent higher after Jefferies said the company was its top pick in the paper and packaging sector for the current year.

Oil prices also edged up after news of the upcoming trade talks, boosting heavyweights BP and Shell by 2.4 per cent and 1.5 per cent respectively, while London-listed Irish company Tullow Oil saw its share price climb 6.9 per cent.

Europe

The Stoxx Europe 600 Index rose 2 per cent to the highest in more than two weeks on the biggest advance in a week. In Germany, the Dax rose 3.4 per cent, while France’s Cac 40 index was 2.7 per cent higher.

Shares in German pharmaceutical giant Bayer climbed 6.7 per cent after a ruling by a US judge could restrict evidence favouring the plaintiffs in lawsuits alleging Bayer's glyphosate-based weed killer causes cancer.

Chipmaker AMS, which provides the facial recognition technology used in the latest iPhone, rose 4 per cent – a hesitant recovery after Thursday's 23 per cent plunge.

ProsiebenSat 1 shares fell 3.4 per cent after analysts Morgan Stanley cut its price target on the stock, in a negative note on European television stocks highlighting rising competitive pressure from subscription video-on-demand.

US

Wall Street opened sharply higher and enjoyed good fortunes in early trading after new data for December showed the US economy posted its strongest job growth since last February.

Stocks extended gains to more than 2.5 per cent when Federal Reserve chairman Jerome Powell said the central bank can be patient as it assesses potential risks to the US economy and is "prepared to adjust policy quickly and flexibly" if needed.

The heavyweight FAANG stocks – Facebook, Apple, Amazon, Netflix and Google-parent Alphabet – surged between 3.6 per cent and 7.8 per cent, bolstering gains on the S&P and Nasdaq.

Despite the rally, US stocks are anchored near mid-2017 lows after a torrid December. – Additional reporting: Bloomberg/Reuters

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