Shares climb along with US retail sales

European shares climbed, wiping out earlier losses, after data showing better-than-forecast US data on retail sales and consumer sentiment stoked optimism about the health of the world’s biggest economy.

The Stoxx Europe 600 Index gained 0.5 per cent at the close of trading. It erased a drop of as much as 0.8 per cent after reports showed US retail sales in April rose the most in a year, while consumer sentiment in May also improved.

DUBLIN

The Iseq index of Irish shares bucked the generally positive end-of-week trend across Europe, falling 0.3 per cent to 6,122.47.

Banks stood out as a weak spot again as investors continued to fret about the new Government's policies to keep pressure on lenders to cut variable mortgage rates. Bank of Ireland lost 1.7 per cent to 23.7 cents, while Permanent TSB, which had borne the brunt of selling for much of the week, declined 0.3 per cent to €1.95.

Allied Irish Banks, which is on the junior market and only has a freefloat of 0.2 per cent, fell 3 per cent to €7.60. During the week, Finance Minister Michael Noonan poured cold water on the prospect of the State's much-anticipated sale of a stake in the bank happening this year.

Ryanair declined 0.8 per cent to €12.81 as investors continued to prepare for the possibility of the airline accompanying its full-year results later this month with an effort to rein in analysts' profit growth expectations for the year through March 2017.

Kingspan was also on offer, falling 3.95 per cent to €23.20, as Eurostat, the EU's statistics agency, estimated the euro zone economy grew at a slower rate than analysts expected in the first quarter.

LONDON

Britain’s shares erased losses to close higher, snapping a streak of weekly slides.

The FTSE 100 Index added 0.6 per cent at the close of trading in London, reversing a decline of as much as 0.7 per cent.

The rally was broad based, with British supermarkets, banks (including Standard Chartered and Lloyds Banking Group) and mining companies among the top risers.

However, a 4.2 per cent fall in satellite communications company Inmarsat hampered gains after an outlook cut from sector peer Eutelsat sent its shares more than 27 per cent lower.

Broadcaster ITV was also among the top fallers, down 2.4 per cent and extending its losses from the previous session as brokers including Deutsche Bank, Barclays, JP Morgan, Citigroup and UBS cut their price targets on the stock.

ITV cut its advertising revenue forecast on Thursday, saying that companies were holding back from buying advertising in the build-up to next month’s Brexit referendum.

EUROPE

Retailers posted the best gains among industry groups in a volatile session that ended on a positive note, with Tesco and Spanish food store giant Distribuidora Internacional de Alimentacion up more than 3.8 per cent.

Among shares active on corporate news today, Bouygues rose 2.6 per cent after the building and media conglomerate said results at its telecommunications business improved and that France's construction business is stabilising.

NEW YORK

US stocks were lower yesterday afternoon as a decline in oil prices added to the pressure from consumer stocks after strong April retail sales data was overshadowed by gloomy earnings reports from retailers.

Oil prices slipped yesterday as a strong dollar weighed and investors cashed in on gains during a three-day rally.

Consumer stocks fell after two more department store operators, Nordstrom and J Penney reported lower-than-expected sales. Apple was up 0.5 per cent a day after hitting a two-year low. Nvidia surged 11.4 per cent to $40.05 after it forecast better-than-expected revenue for the current quarter. – (Additional reporting: Bloomberg/Reuters)