Dublin and London markets outperform as European shares finish flat

European stocks ended flat on Wednesday, with gains in economy-sensitive sectors offset by a rise in bond yields as investors raised their inflation expectations for the year.

Consumer-oriented automobile and travel stocks were the day's best performers, while the London market rose after British chancellor of the exchequer Rishi Sunak extended emergency programmes to support the economy through the Covid-19 pandemic.

DUBLIN

The Iseq advanced 2.8 per cent, outperforming the muted trend across Europe as its biggest stocks jumped.

Ryanair soared 3.6 per cent to €16.95, recovering its losses in the previous session, after chief executive Michael O'Leary said the airline could fly up to 70 per cent of its 2019 summer traffic in peak season this year, and added that he hoped Ryanair would operate at close to breakeven in the 12 months to the end of March 2022.

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Building materials giant CRH gained 2.7 per cent to €38.16 ahead of its earnings release on Thursday, while food group Glanbia added 2.9 per cent to finish at €11.52, extending its 4 per cent gain in the previous session.

After ending down 1.9 per cent on Tuesday when it published financial results, Paddy Power-owner Flutter Entertainment was up 5 per cent at €171.10.

Bank of Ireland rose 1.4 per cent to €3.54, while AIB surged 6.5 per cent to €2.07 ahead of its latest earnings release on Friday.

Smurfit Kappa also had a good day, with the packaging company closing at €40.86, up 2.2 per cent.

LONDON

The FTSE 100 blue-chip index rose 0.9 per cent, while the mid-cap FTSE 250 finished 1.2 per cent higher as Sunak announced his budget.

Bank stocks rose after Sunak said the UK would review a tax surcharge on bank profits to make them more competitive against foreign rivals. But Sunak also announced future tax rises to offset the large hole left in public finances by current spending.

Shares in housebuilders gained on news of an extended tax break for homebuyers, with Persimmon one of the top risers in the FTSE 100, up almost 7 per cent.

Pub firms JD Wetherspoon and Premier Inn-owner Whitbread also rose more than 5 per cent, helped by an extended VAT cut for the hospitality sector.

However, shares in insurance company Hiscox tumbled 11.8 per cent as the company swung to a huge loss for 2020 and continued to withhold a dividend.

EUROPE

The pan-European Stoxx 600 index ended largely unchanged after opening stronger, with utility stocks leading losses in the euro zone. European bond yields rose.

Healthcare and technology shares also suffered big losses as focus turned away from defensive stocks and towards sectors more likely to benefit from an economic recovery.

French stocks added 0.35 per cent, while German stocks ended about 0.3 per cent higher, with investors anticipating a gradual easing of coronavirus curbs as a sluggish vaccination campaign accelerates.

Automobile supplier Continental jumped 5.4 per cent after UBS upgraded its rating to "buy", citing "attractive" value-creation from the company's plans to spin off its powertrain unit Vitesco.

Swiss logistics group Kuehne & Nagel International rose 7.1 per cent to the top of the Stoxx 600 as it notched up record full-year operating profit.

US

The S&P 500 and the Nasdaq fell in early trading as investors sold off high-flying technology shares and pivoted to sectors more likely to benefit from an economic recovery on the back of more fiscal stimulus and the rollout of Covid-19 vaccines.

Microsoft, Apple and Amazon.com dropped between 0.9 per cent and 1.6 per cent, weighing the most on the S&P 500.

Exxon Mobil rose 1.5 per cent after the oil major unveiled plans to grow dividends and curb spending with projections that were less bold than previous years. – Additional reporting: Reuters