Dublin bucks cautious global mood

Dublin was an exception – for company-specific reasons – as global markets started February trading in cautious mode after a rocky January. Major US and European stocks fell.

Dublin

Ryanair

and

Paddy Power

were the primary focus on the Irish Stock Exchange as the market gained 1.66 per cent to take the ISEQ index to 6,448.24.

“Today was dominated from an Irish point of view by two stocks, Ryanair and Paddy Power,” a trader said.

Both shares rose sharply yesterday, with Ryanair unveiling an €800 million share buyback after a big jump in profits. Similarly, Paddy Power’s merger with Betfair and their inclusion on the Morgan Stanley Composite Index spurred considerable buying interest.

Ryanair shares closed 5.95 per cent higher at €14.50 in Dublin. The airline’s post-tax profit more than doubled in the three months to December, rising to €103 million from €49 million one year previously.

Despite falling ticket prices, Ryanair said record passenger numbers will enable it to hit its profit target as it affirmed its forecast of net profit at the upper end of a range between €1.175 billion and €1.225 billion.

“Ryanair’s number this morning were stellar,” said one Dublin trader. “They were slow to get going, up a little bit initially. After the conference call they took momentum. They’re killing the competition.”

Paddy Power shares added close to 4 per cent to finish at €142.75. About €1 billion shares changed hands. The imminent €10 billion merger with Betfair spurred a “record” share auction .

London

Britain’s top index retreated from three-week highs, with commodity shares falling after a factory survey in China, a major consumer of metals and oils in the world, disappointed.

The blue-chip FTSE 100 index closed 0.4 per cent weaker at 6,060.10 points, after falling to an intra-day low of 5,993.84 points. The index hit a three-week high in the previous session, but is still down more than 3 per cent since the beginning of 2016 on China concerns.

The latest survey showed activity in China’s manufacturing sector contracted at its fastest pace in almost three-and-a-half years in January, marking the sixth straight month of factory activity contraction.

“With a week heavy on both macro and corporate data, it’s all about PMI readings today and the manufacturing sector has not exactly given much to cheer about,” said Brenda Kelly, analyst at London Capital Group. “The FTSE started well but has run out of steam at 6, 100, led by the energy sector as oil . . . once again flounders.”

Europe

European stocks declined as deteriorating Chinese and US data dented the investor optimism.

The Stoxx Europe 600 Index slid 0.2 per cent to 341.61 at the close, paring earlier declines of as much as 1.2 per cent in late trading. The gauge delivered its worst January drop since 2008 amid concerns about China and oil. While stimulus from the Bank of Japan and speculation of added measures by the ECB tempered some losses in the past two weeks, anxiety over global growth is returning to the fore. “Investors are getting conflicting signals about global growth,” said Daniel Murray, London-based head of research at EFG Asset Management.

Wall Street

US stocks fluctuated after erasing declines, with gains in Facebook Inc and Alphabet Inc helping to overcome a crude-oil led selloff while concerns faded that China’s slowdown will spread. Energy companies retreated with crude prices, after capping back-to-back weekly advances for the first time since November. Exxon Mobil Corp sank 2 per cent before its earnings report on Tuesday. Gains among internet companies helped put a floor under equities, with Facebook and Google parent Alphabet rising more than 1.4 per cent. Netflix Inc increased 3.3 per cent amid speculation Apple Inc could make an offer for the company.