Stock markets rally after trade war fears ebb

European stocks jumped to their highest level in more than two weeks on Thursday as investors bought back into risky assets and trade tensions between the United States and China appeared to ebb.

After a retaliatory blow from China against proposed US tariffs drew conciliatory noises from Washington, some investors calculated a full-blown trade war would be averted.

Dublin

The Iseq index climbed 2 per cent as it tracked gains in equity values across Europe and the US. Bank of Ireland rose 4.5 per cent to €7.28 on a good day for financial stocks, while Ryanair soared almost 3.5 per cent to €16.44.

Building materials group CRH, the largest stock on the index, was another strong climber, advancing 2.3 per cent to €27.85, and paper and packaging group Smurfit Kappa finished up 1.9 per cent at €34.96. C&C added another 1.4 to its share price following Wednesday’s surge on its acquisition of Matthew Clark Bibendum. The drinks group closed at €2.90.

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Few stocks lost ground, but they included Paddy Power Betfair, which slipped 1.4 per cent to €80.20, and Origin Enterprises, which was down almost 1 per cent at €5.02, while food group Glanbia was 0.5 per cent lower at €13.70.

London

The blue-chip FTSE 100 ended up 2.4 per cent, its biggest one-day gain since June 2016.

Just Eat posted one of the worst performances, ending down 1.3 per cent after JP Morgan downgraded the rating of its stock.

Hammerson rose 1.6 per cent after it said it did not intend to complete shareholder documents related to its proposed acquisition of Intu Properties because it was waiting for clarification on a bid from France’s Klepierre.

Midcap stocks rose 1.6 per cent. Shares in Sophos skyrocketed 15 per cent after the cybersecurity firm said billings growth for the year would be towards the top end of guidance.

British casino operator Rank posted the worst performance of the midcap universe, down 15.7 per cent, after it said it expected lower profit for the full year.

Europe

The Stoxx 600 rose 2.4 per cent, scoring its best day since June 2016, buoyed by financials and industrials stocks. In Germany, the market most exposed to China, the Dax finished up 2.9 per cent, while in France, the Cac 40 added 2.6 per cent.

Basic resources and tech stocks, the sectors seen as most vulnerable to higher trading costs, led gains on Thursday. Chipmakers Infineon and ASML, telecom equipment maker Nokia and software company SAP were the top performers, up 1.8 to 4.5 per cent.

Heavyweight financials, a bellwether of investors' perception of global market risks, added the most points to the index, while big industrial exporters Siemens, ABB and Airbus rose 2.2 to 3.5 per cent.

Telecom Italia shares gained 5.2 per cent after sources told Reuters that Italian state lender CDP was set to buy a stake. Telecom Italia's biggest shareholder Vivendi rose 3.6 per cent. Video games maker Ubisoft jumped 10.8 per cent after traders pointed to the success of its latest game Far Cry 5.

New York

The S&P 500 on Thursday headed for its best three-day rise since Donald Trump’s election as technology and industrial shares bolstered a recovery on easing trade war concerns.

Facebook, Amazon, Netflix and Google (now Alphabet) – collectively known as the "Fang" group – were up between 1.2 per cent and 2.6 per cent.

Facebook shares gained after chief executive Mark Zuckerberg said the company had not seen "any meaningful impact" on usage or ad sales since the data privacy scandal. Analysts at Deutsche Bank said the tone of his comments suggested "the worst is likely behind" the stock.

Shares of Boeing and Caterpillar, among the worst hit on Wednesday after China retaliated with $50 billion in tariffs on US goods, rose 1.7 per cent and 3 per cent. – Additional reporting: Reuters and Bloomberg