European shares hit record highs over prospect of vaccine boost and US spending

Prospects of a vaccine-driven economic boost and a big US spend on infrastructure sent European shares to record highs on Tuesday, aiding banks in particular.

DUBLIN

Ryanair Holdings gained altitude as it emerged that Johnson & Johnson would deliver 200 million vaccines to the EU next month, and analysts were more upbeat about European airlines generally.

The Irish carrier, Europe’s biggest, advanced 4.21 per cent to close at €16.725 after trading at a high of €16.81 earlier in the day.

A note from stockbrokers Davy boosted Irish banks, which were already gathering momentum on positive sentiment towards lenders. AIB added 3.55 per cent to €2.278, and Bank of Ireland rose 3.85 per cent to €4.32. However, Permanent TSB shed 0.91 per cent to €1.09.

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"Banks across Europe have been pretty strong today," one trader noted.

Building materials giant and index heavyweight CRH added 1.07 per cent to €39.59. In the same sector insulation-maker Kingspan gained 1.16 per cent to €69.80.

Dealers said both companies benefitted from the prospect that US president Joe Biden will announce plans for significant infrastructure spending this week. CRH and Kingspan earn large revenues from their US businesses.

House-builder Glenveagh Properties rose 1.1 per cent to 91.9 cent. Rival Cairn Homes was up 0.37 per cent at €1.072.

Food group Glanbia, best known to consumers as manufacturer of Avonmore dairy products, climbed 1.75 per cent to €12.78. In contrast, Kerry Group was down 1.54 per cent at €108.40.

LONDON

Aer Lingus and British Airways-owner IAG gained 5.05 per cent to 201.9 pence sterling. Budget carrier and key Ryanair rival EasyJet added 5.54 per cent to 990p.

British banks benefitted from the boost to sentiment too. Barclays climbed 4.6 per cent to 189.14p, and Natwest added 3.8 per cent to close at 197.3p. Legal and General added 3.4 per cent to 285.6p.

AG Barr shares dropped by 35p to 486p after the drinks supplier said its profits plunged 30.5 per cent to £26 million for the year to January 24th as sales fell 11.2 per cent.

Shares in pub chain Wetherspoons, which owns several bars in Dublin, lifted after the company said it would invest £145 million opening new pubs and upgrading existing ones, creating 2,000 new jobs. Shares were 22p higher at 1,361p at the close of play on Tuesday.

EUROPE

The pan-European Stoxx 600 index gained 0.7 per cent, trading less than 1 per cent below its pre-pandemic peak.

German carrier Lufthansa climbed 4.47 per cent to €11.44 on the general swing in airlines' favour. Air France KLM added 3.75 per cent to close at €5.20.

The German DAX rose 1.3 per cent to scale a record high, boosted by automakers and a 1.6 per cent rise in Deutsche Bank to €10.30.

The same lender upgraded Italian luxury puffer jacket maker Moncler, which rose 2.9 per cent to €49.21, and Swiss watch group Swatch, which gained 3.33 per cent to 278 francs.

Swiss lender Credit Suisse fell 3.1 per cent to 10.42 francs, following its near 14 per cent slide on Monday, as it warned of "highly significant and material" losses after hedge fund Archegos Capital Management defaulted on margin calls.

US

Wall Street’s main indices slipped on Tuesday as investors pulled out of heavyweight tech-related stocks and flocked to undervalued banks and industrial shares, spooked by a new high in US bond yields.

Apple, Microsoft, Amazon. com and Broadcom dropped between 0.9 per cent and 2.7 per cent, with US 10-year Treasury yield hitting a 14-month high.

Wells Fargo jumped 3 per cent after the lender said it had a prime brokerage relationship with Archegos Capital and that it no longer had any exposure and did not experience any losses.

GameStop Corp added about 2 per cent after it named Amazon.com executive Elliott Wilke as chief growth officer, the latest top level appointment after shareholder Ryan Cohen took charge of the video game retailer's shift to e-commerce. – Additional reporting Reuters