European shares give up gains amid concerns over Brexit

European shares pared early gains to finish lower on Thursday as optimism around some progress in US-China trade talks were outweighed by losses in banks amid a gloomy outlook for global economic growth and uncertainties around Brexit.

The pan-region Stoxx 600 index slipped 0.1 per cent, with Frankfurt’s trade-sensitive index Dax giving up most gains to close 0.08 per cent lower, while Madrid and Milan slipped more than half a per cent each.

The pullback intensified after data showed that economic growth in the United States slowed more than expected in the fourth quarter – the latest addition to a slew of poor economic data from around the globe.

The 0.6 per cent rise in London’s FTSE 100 was the most among regional indices, spurred by a weaker pound after Wednesday’s indicative vote on Brexit ended in a deadlock. Efforts to persuade lawmakers to back British prime minister Theresa May’s deal continue with a parliamentary debate scheduled for Friday amid reports that it will not be a so-called “meaningful vote”, making the rounds.

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DUBLIN

Trading volumes were on the lighter side on a day with little or no company specific news. Ryanair performed strongly in the context of the sector which has struggled since the Boeing crisis, rising 0.3 per cent to €11.78. The airline's stock also benefitted from a positive investment note from Davy Stockbrokers. Rival airline stocks in Europe were down on the day.

Packaging giant Smurfit Kappa had a poor day, trading down 2 per cent at €24.18 following the release of negative industry data. Bank of Ireland rose by a less-than-expected 1 per cent to €5.33 after news it is planning to refinance a basket of non-performing mortgages worth about €375 million. The move is designed to reduce its exposure to troubled loans.

Iseq heavyweight CRH rose by 0.2 per cent to €26.75 amid mixed news for the sector.

LONDON

In London, Debenhams got the green light to press ahead with a £200 million refinancing, paving the way for the likely wipeout of existing shareholders, including Mike Ashley's Sports Direct. Shares in the company dropped 0.71p to 2.09p. The company also announced that it would leave its head office in London and move into the upper floors of its Oxford Street branch, in a bid to cut costs.

Outsourcing giant Mitie saw shares come under pressure, dropping 10.8p to 139.2p after forecasting lower-than-expected annual profits and warning that orders shrank by around 10 per cent over the past year. Utility giant SSE has said it was continuing to work on "future options" for its retail supply arm after the collapse of its merger with Npower last year. The stock fell 17p to 1,203p.

EUROPE

German mobile operator 1&1 Drillisch's almost 15 per cent tumble on fears it could suspend dividends for 5G spectrum auction bid was the biggest on the region's benchmark index. Auto stocks fell as Fiat Chrysler slid 2 per cent after Nissan Motor's chief executive said he was unaware of discussions about its French partner Renault making a bid for the Italian company. Adding to Fiat Chrysler's woes, Volkswagen said it was not interested in a partnership with the company.

Losses on the Stoxx 600 were limited as international companies, which typically gain from weakness in the pound, such as pharmaceutical giants AstraZeneca and GlaxoSmithKline rose more than 1.5 per cent each.

German industrial gases group Linde was among top boosts, up 1.8 per cent as UBS raised its price target on the company. Tech stocks also staged a comeback with French IT services company Capgemini up 3.8 per cent.

NEW YORK

Wall Street’s main indexes swung between gains and losses on Thursday, as optimism fuelled by progress in US-China trade talks was clouded by fears of an economic slowdown after a cut in fourth-quarter GDP growth.

Data showed the US economy slowed more than initially thought in the fourth quarter, keeping growth in 2018 below the 3 per cent annual target, and corporate profits failed to rise for the first time in more than two years.

Trade sensitive industrial stocks rose 0.33 per cent, with Caterpillar up 0.6 per cent and 3M gaining 0.3 per cent.

Consumer discretionary stocks rose 0.42 per cent, led by a 14.9 per cent gain in shares of PVH. The Calvin Klein owner forecast full-year adjusted profit and sales above Wall Street expectations. Nielsen Holdings tumbled 10.4 per cent, the most among S&P 500 companies, after a report that private equity firm Blackstone Group backed out of an auction to buy the ratings company. – Additional reporting by Reuters