Stock markets rise globally as investors cheer gridlocked US Congress

Stock markets rose globally on Wednesday as investors cheered the outcome of the US midterm elections, which, in delivering a gridlocked Congress, eased fears that president Donald Trump's tax cuts or financial deregulation measures would be reversed.

The pan-European Stoxx 600 index closed 1 per cent higher, while, in Dublin, the Iseq overall index rose 1.9 per cent to 6,254.77.

DUBLIN

Kerry Group gained 2.6 per cent to €93.70, as the taste and nutrition giant published a solid trading update showing that business volumes rose by 3.5 per cent in the first nine months of the year.

CRH was also in demand, rising 3.3 per cent to €26.51, recovering from a wobble on Tuesday as markets prepared for the outcome of the US midterm elections, which saw the Democrats regain control of the House of Representatives while the Republicans tightened their grip in the Senate.

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"With the Democrats taking over the House we will now have to see what gridlock in Congress means for policy. As for the market impact, a split Congress has historically been bullish for equities and we expect to see the same pattern again," said Torsten Slok, chief international economist at Deutsche Bank.

Malin Corporation added 7.5 per cent to €4.28 amid hopes that the life sciences investment company, whose stock is currently trading at a little over 40 per cent of its 2015 initial public offering price, will offer investors some hope on future strategy in a capital markets day on Thursday.

Bucking the trend, Permanent TSB lost 2.5 per cent to €1.92 ahead of a trading update from the lender on Thursday.

LONDON

The FTSE 100 top share index gained 1.1 per cent, helped by fresh optimism on Brexit talks.

Among the fallers, ITV posted the worst performance, down 2.7 per cent. The broadcaster said an increasingly uncertain economic outlook would take its toll on revenues in the last three months of the year, blunting the impact of a slightly better than expected performance over the year so far.

Sales at Marks & Spencer fell in the first half of its financial year, with demand for clothing and food hit by disruption from the latest attempt to reinvent Britain's most famous retailer.

Its shares gradually limited their losses to 0.5 per cent.

Shares in Britain's G4S tumbled more than 17 per cent after the world's biggest security firm said profit would not grow this year.

EUROPE

Spanish banks were in the spotlight after a government move to counteract a court ruling that would have forced customers to pay mortgage stamp duty, pledging to pass a law to oblige banks to pay the tax.

Banking shares, which had rallied initially on the court ruling, came off early highs after the government’s announcement but largely held gains after it became clear that the new law would not be applied retrospectively.

Shares in Caixabank Sabadell, BBVA , Santander and Bankia were up by between 1.8 per cent and 4.1 per cent.

Company results announcements drove some of the biggest movers across Europe, with Scout24, Ahold and Vestas rising rising by between 6.2 per cent and 7.6 per cent after strong updates. Adidas fell 3.6 per cent as the sportswear company cut its revenue target after a fall in sales in western Europe.

NEW YORK

Riskier assets were also in favour on Wall Street in early afternoon trading as investors digested the US midterm election results.

In a sign of relief that the elections are over, tech stocks that took the brunt of October's sell-off rallied the most, with the Nasdaq 100 surging more than 2 per cent. Amazon. com and Netflix were up more than 5 per cent at one point.

The Dow Jones Industrial Average was up 1.1 per cent, at 25,912.16, while the S&P 500 advanced 1.3 per cent.

Health insurers Humana, Anthem and UnitedHealth Group jumped to record highs as voters in three states approved expanding Medicaid programs for low-income people.

Among the laggards were luxury handbag maker Michael Kors and beauty products maker Coty, which tumbled after missing quarterly revenue estimates.

– Additional reporting, Reuters, Bloomberg