Global stocks defy Delta variant to extend June rally

Global stocks extended their June rally on Tuesday, defying concern over elevated valuations and a highly infectious coronavirus strain that has spurred caution among investors around the world.

Dublin

The Iseq index added 0.6 per cent to 8,234.47, staging a tentative rally from losses on Monday, which had been amid concerns about the spread of the Delta variant of Covid-19 and concerns about the impact on the reopening of the economy.

Banking stocks were among the main rebounders, with AIB adding 1.8 per cent to €2.23, while Bank of Ireland gained 3.2 per cent to €4.60.

Housebuilders were also in demand on the back of reports this week that house price inflation is continuing apace, and as Irish players in the sector benefited from fresh investor demand for UK builders. Cairn Homes and Glenveagh Properties each jumped 2.9 per cent.

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However, Dalata Hotel Group was unable to join in the rally and ended up down 1.8 per cent to €3.84 amid concerns over the near-term outlook for hospitality.

London

London’s FTSE 100 ended higher, led by mining and retail stocks, while rising cases of a new Covid-19 variant in Europe and Asia stoked fears of a slower economic recovery.

The blue-chip FTSE 100 index edged 0.2 per cent higher, with miners including Glencore, Rio Tinto and BHP providing the biggest boost to the index.

Homebuilders advanced 0.8 per cent and were among the top gainers after mortgage lender Nationwide said British house prices rose by 13.4 per cent in June compared with a year earlier, the biggest annual increase since November 2004.

Rising cases of the Delta variant of Covid-19 benefited online retail stocks including Just Eat Takeaway.com and Ocado Group which rose 1.7 per cent and 0.7 per cent respectively.

Barratt Developments gained 0.4 per cent after naming Mike Scott as its chief financial officer. Scott is at present finance chief at Countryside Properties.

Europe

European shares ended higher after data showed economic sentiment improved sharply in June, while Adidas lifted the German index with a share buyback plan.

The pan-European Stoxx 600 closed 0.3 per cent higher at 456.37 points, after data showed euro-zone economic sentiment hit a 21-year high in June as a steady vaccination programme saw several economies reopen.

While the data did not factor in the new Delta variant of the coronavirus, the improving mood saw investors pile into sectors most likely to benefit from a recovery.

Chemical stocks rose 0.9 per cent, while automobile and financial services were among the best performers.

German shares were the best performers, adding 0.9 per cent. Adidas rose 2.5 per cent to a record high after the sportswear maker said it will launch a new share buyback programme worth up to €550 million ($654 million).

Travel-related European stocks fell 0.2 per cent after their worst session in more than a month, following reports of a potential ban on UK travellers in Germany. Spain also tightened travel rules for British tourists.

Among individual stocks, French electrical parts supplier Rexel jumped 4.3 per cent after it lifted its 2021 sales forecast.

New York

The S&P 500 hit a record high for the fourth straight session, helped by shares of heavyweight technology firms and banks, while an upbeat consumer confidence report set a positive tone for key jobs data at the end of the week.

Eight of the 11 major S&P sectors rose, with technology, energy and industrials among the top gainers.

Morgan Stanley jumped 4.1 per cent after it doubled its dividend to 70 cents per share in the third quarter. JPMorgan Chase & Co, Bank of America and Goldman Sachs Group also raised their payouts.

Moderna jumped 5.43 per cent to a record high after the drugmaker's Covid-19 vaccine showed promise against the Delta variant first identified in India in a lab study, with a modest decrease in response compared to the original strain. (Additional reporting: agencies)