EU-Italy budget strife keeps a lid on European markets

European stock markets crept higher on Wednesday as defensive shares gained ground, but rising tensions between Italy and the European Commission over the country's debt dampened sentiment.

The caution in Europe made the region an outlier, as US Federal Reserve chairman Jerome Powell's accommodative comments late on Tuesday helped to support assets globally.

Dublin

Forecourts retailer Applegreen saw shares slide as it became the latest company to blame Brexit for a poor performance. Shares in the Ireland and UK focused group fell by 1.5 per cent to €5.18 at the close of trading.

Dublin-listed oil and resource companies fared poorly, after Brent crude futures tumbled below $60 a barrel on the back of a report that showed US oil inventories ballooning by the most in almost 30 years. This fed fears of a glut as trade disputes threaten demand.

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Providence Resources fell 16 per cent to 9 cents, while Petroneft Resources was down 15 per cent, languishing at just over 1 cents per share.

Swiss-Irish food group Aryzta was the best performer on the Iseq on Wednesday, up 5.7 per cent to €108. It clawed back some of the ground it lost on Tuesday, when it released annual results and cut its earnings outlook.

The call by outgoing Central Bank governor Philip Lane for the restoration of bank bonuses did little for the sector, with Bank of Ireland up less than 0.4 per cent to €4.81.

London

Shares in Game Digital surged higher after Mike Ashley's Sports Direct International made a £51.9 million bid for the computer game retailer. Sports Direct is offering 30p a share for Game. Shares in Game Digital closed up 5.5p at 29.1p. Shares in Sports Direct fell marginally, down 0.8p to 293.8p.

Elsewhere, Non-Standard Finance (NSF) saw shares plummet after it called off its hostile £1.3 billion offer for doorstep lending rival Provident after failing to gain enough backing for the bid. NSF shares closed down 5.5p at 41.5p on Wednesday.

Ladbrokes and Coral owner GVC saw shares rise, despite suffering a stinging shareholder revolt at its agm. Britain's biggest bookmaker saw shares rise by 15p to 625p.

Europe

The STOXX 600 index gained 0.4 per cent, rising for a third straight day. Germany's DAX edged up 0.1 per cent, while Italian equities shed 0.4 per cent. While Europe's lenders fell 0.5 per cent, Milan-traded banks dropped 1.6 per cent. UniCredit slid 3.5 per cent, while Banco BPM declined 2.2 per cent.

Berenberg trimmed its price target on Madrid-listed Caixabank; its shares fell 3.5 per cent.

Utilities and real estate stocks rose late in the day, especially after comments from Italian deputy prime minister Luigi Di Maio, tacking on 1.4 per cent and 1.1 per cent, respectively. Di Maio complained that Brussels had treated Rome unfairly, but said he wanted constructive talks with the commission.

Industrial goods and services stocks rose 0.7 per cent, aided by Dassault Aviation surging 5 per cent after Goldman Sachs upgraded the aviation firm's stock to "Buy". Basic resources firms fell 1 per cent, with losses partially cushioned by Norsk Hydro's 0.9 per cent rise.

New York

US stocks rose on Wednesday as expectations of an interest rate cut by the Federal Reserve were lifted following the weakest pace of private sector jobs growth in more than nine years in May.

The defensive utilities and real estate were among the best performing S&P sectors.

Apple was the only gainer among the high-growth FAANG stocks, up 2 per cent. Others in the group – Amazon. com, Facebook, Alphabet and Netflix – lost between 0.1 per cent and 1.1 per cent and pressured the Nasdaq.

Campbell Soup jumped nearly 9 per cent, the most on the S&P index, after the food company raised its full-year profit forecast. Salesforce. com rose 3.2 per cent after a quarterly beat and above expectations full-year forecast.

(Additional reporting: Reuters/PA)