European shares hit new highs as US-China trade deal boosts optimism

European shares hit record highs on Monday as an initial US-China trade deal boosted investor optimism.

News of a “first-phase” deal followed Friday’s Conservative Party victory in the UK election that eased uncertainty over Brexit.

Dublin

Kerry's shares fell almost 3 per cent on Monday after the food and ingredients group missed out on a $26 billion deal which would have been the largest ever done by an Irish-listed company.

The group was in the hunt for US chemical maker DuPont's flavouring business, which makes ingredients for everything from vegan burgers to detergent. However, International Flavors & Fragrances won the day, paving the way for it to create a $45 billion group.

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Kerry’s shares slipped 2.8 per cent as investors digested the news.

The market shrugged off Greencoat Renewable's successful bid to raise €125 million by issuing new shares in the wind farm group. Its stock remained unchanged at €1.205. Greencoat will use the cash to continue buying renewable electricity generators in the Republic.

House builder Glenveagh Properties fell 1.25 per cent to 79 cent. Its shareholders will vote on a restructuring allowing the company extra scope to return cash to investors an extraordinary general meeting in Dublin on Tuesday.

Bank of Ireland dipped 0.99 per cent to €5.105 while peer AIB remained unchanged at €3.298. Building materials giant and index heavyweight CRH gained 1.04 per cent to €36.09. Airline Ryanair climbed 1.18 per cent to €14.54.

London

News that troubled subsidiary House of Fraser was showing "green shoots of recovery" sent SportsDirect's shares sprouting by more than 30 per cent.

The sportswear chain said it expected full-year earnings to grow by up to 15 per cent. Its shares rose 31.17 per cent to 472.2 pence sterling.

Despite signs of recovery at department store group House of Fraser, which SportsDirect bought out of insolvency last year, billionaire founder Mike Ashley said he could close more of the subsidiary's stores if they were loss-making.

Irish-founded explorer Tullow Oil, which last week scrapped its dividend and warned of production problems from key reservoirs in Africa, shed 10.18 per cent to 60.9p.

Shareholders in FirstGroup, which operates the Great Western Railway, South Western Railway, TransPennine Express and Avanti West Coast, were pleased at an announcement that it would sell its US businesses. It added 5.9 per cent to close at 125.4p.

Cineworld, well known to Irish filmgoers, unveiled plans to become the biggest cinema chain in North America by buying Canada's largest operator, with a $2.8 million Canadian dollars (€1.9 million) bid for Cineplex. Shares rose 2.5 per cent to 211.2p.

Miners rose on good news for a US-China trade deal. Glencore added 3.3 per cent to 233.35p. BHP gained 2.31 per cent to 1,778.4p.

Aer Lingus and British Airways owner International Consolidated Airlines Group rose 1.68 per cent to 640p.

Europe

The Europe-wide Stoxx 600 gained 1.4 per cent to hit a record high of 417.75.

Swedish washing machine and oven manufacturer Electrolux tumbled 10.6 per cent to 224.3 Swedish kroner after warning that its North American business would take a bigger-than-expected hit, partly because of costs from its move into a new plant in South Carolina. German auto maker Volkswagen dipped 0.58 per cent to €182.24.

US

Wall Street hit highs for the third straight session after a US-China deal suspended tariffs on consumer goods , including iPhones, that could have applied from this week. Apple gained 1.8 per cent on the news.

Boeing fell 3.8 per cent after reports that the aircraft manufacturer had considered whether to cut or halt production of its grounded 737 Max aircraft.

European airlines including Ryanair are waiting for delayed deliveries of this model to restart once regulators give the go ahead. Additional reporting: Reuters