Strong earnings and M&A activity push European stocks higher

European markets began August on a high as strong earnings reports and a rash of mergers and acquisitions helped push stocks to six straight months of gains.

Dublin

Banks gained ground after stress tests indicated that they needed no additional capital. AIB advanced 1.21 per cent to close at €2.097. Peer Bank of Ireland closed flat at €4.48, but had reached a high of €4.565 in early trade on Monday.

Elsewhere, Ryanair added 1.15 per cent to €16.765 as the UK government ended quarantine requirements for fully-vaccinated travellers from the European Union and the United States, except those from France, on Monday.

The move means that those coming from most countries on the UK’s “amber list” do not need to self-isolate once they are fully jabbed. Britain is a key market for Ryanair.

European stocks slip back from all-time highs

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European stocks hit record high on earnings from Airbus, commodity majors

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M&A rush and earnings power European stocks to new highs

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European stocks climb after upbeat earnings reports

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Packaging specialist Smurfit Kappa was down 0.44 per cent at €47.36 at the close. Brokers said analysts at brokers Jefferies had downgraded the stock. The shares earlier dipped to €47.31.

London

British aero-engineer Meggitt soared 56.7 per cent to record high of 735 pence sterling, making it Monday's best-performing European stock, after US industrial firm Parker-Hannifin said it would buy the UK rival in a deal valued at $8.76 billion (€7.4 billion).

British asset-management services provider Sanne Group jumped 7.6 per cent to 908p after it said it could get a takeover bid from fund servicer Apex Group.

Aer Lingus and British Airways owner, International Consolidated Airlines' Group, rose 3.19 per cent to 173.46p on the UK government move to further ease quarantine rules on incoming travellers. The move ranked the airline group, also parent of Spain's Iberia and Vueling, as one of the day's best performers on the FTSE 100. Rival EasyJet was flat at 864.4p.

Aircraft engine maker Rolls-Royce rose 3 per cent to 103.48p. Luxury goods brand Burberry gained 3 per cent to 2,125p.

Lender HSBC said it would pay out an interim 5p per share dividend to shareholders as it revealed a more than doubling of pretax profit in its most recent six-month period. Shares fell by 0.3 per cent to 396.15p.

Europe

Insurer Allianz fell 7.8 per cent to €193.70 after warning that a US department of justice investigation into hedge funds that caused investors losses during a pandemic market downturn last year, could materially hit earnings.

The German insurer said it could not estimate the cost of any potential fines, so had not made any provisions.

Axa, Europe's second biggest insurer rose 4.2 per cent to €22.80 after it posted a 180 per cent surge in first-half net income.

Heineken, the world's second-largest brewer, said it expects the pandemic to weigh on key Asian and African markets for the rest of the year and warned rising commodity costs would eat into margins, after reporting first-half earnings above expectations. The shares finished 0.6 per cent stronger on €98.80.

Air France KLM rose 4 per cent to €4.08 on a generally good day for airline and travel stocks across Europe.

German real estate firm Vonovia rose 2.2 per cent to €57.44 as it launched a sweetened, €19.1 billion bid to buy rival Deutsche Wohnen.

The pan-European Stoxx 600 index rose 0.6 per cent to end at a record closing high of 464.45 points, with retail and technology stocks serving as the best performers.

New York

Wall Street gave up early gains as fears about Covid’s Delta variant and a slowing US economy overshadowed optimism about more fiscal stimulus and a strong second-quarter earnings season.

Data earlier in the day showed that, although US manufacturing grew in July, its pace slowed for a second straight month, as spending rotated back to services from goods, and shortages of raw materials persisted.

A 4.1 per cent jump for Tesla, on top of a 6.8 per cent gain last week, helped prop up both the S&P 500 and Nasdaq Composite.

Square, the payments firm of Twitter co-founder Jack Dorsey, jumped 10.3 per cent after it said it would purchase Australian buy now, pay later pioneer Afterpay for $29 billion (€24.4 billion). – Additional reporting: Reuters