Britain’s fiscal U-turn calms market jitters as banks and real estate lift European stocks

Europe’s Stoxx 600 index climbed on Monday, buoyed by banks and real estate companies, as investors cheered the reversal of Britain’s fiscal plan that had sent jitters across the markets. In the US, Wall Street’s main indexes also jumped as Bank of America led a rally among lenders.

Dublin

The Iseq rose almost 2.5 per cent by the end of the session, dragged into the black by the large, indigenous multinationals such as Ryanair, Smurfit Kappa and Kingspan, who tracked their multinational peers.

Companies with significant UK interests fared well. Budget airline Ryanair rose by 1.8 per cent to €11.38 per share. Hotel operator Dalata, which has significant UK financial plans, was ahead by 4.2 per cent to €3.10. Flutter Entertainment, meanwhile, rose by a similar percentage as the Paddy Power owner closed at €124.40 per share.

The big banks also rose amid a more stable atmosphere in the international financial sector. AIB was up 2.2 per cent to €2.95 while Bank of Ireland rose 1.1 per cent to €7.72.

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London

London shares rose as new finance minister Jeremy Hunt reversed prime minister Liz Truss’s economic plan announced three weeks ago, which slammed UK markets and dented investor sentiment.

The blue-chip FTSE 100 index ended 0.9 per cent higher, while the domestically focused FTSE 250 index closed 2.8 per cent up. Both the indexes logged their third straight day of gains.

BP fell 1.2 per cent after the oil giant said it will buy US-based renewable natural gas producer Archaea Energy.

Online mattress retailer Eve Sleep said it has called in administrators after a failed sale process. Its shares were suspended on the London Stock Exchange and it said that it “is not expected” there will be “any return to the shareholders”.

Meanwhile, online retailer Made.com said it has received a raft of takeover proposals after it put itself up for sale last month. It has been hit by a slump in consumer spending and supply chain disruption. Shares rose more than 10 per cent.

Fashion retail giant Asos saw its shares slump after confirming it is in talks with lenders over changing the terms of a £350 million borrowing facility. Its share price fell 2.5 per cent.

Europe

The region-wide STOXX 600 index ended 1.8 per cent higher, extending gains for a third straight session. All the Stoxx 600 sectors advanced, with real estate up nearly 4 per cent, followed by a 3.3 per cent rise in travel and leisure stocks. Banks added 2.3 per cent.

Among individual stocks, Credit Suisse rose 2.6 per cent. Reuters reported the Swiss bank has approached at least one Middle Eastern sovereign wealth fund for a capital injection.

Nel rose 3 per cent after the Norwegian hydrogen company received a 600 million kroner (€58 million) order from Woodside Energy for a US hydrogen project.

Mowi added 4.9 per cent after the Norwegian salmon farmer’s third-quarter profit came in above expectations.

New York

Bank of America jumped 5.17 per cent after reporting a smaller-than-expected drop in profit, with its new loans benefiting from higher borrowing costs.

Bank of New York Mellon also benefited from higher interest rates, sending its shares up 4.48 per cent.

Overall, higher rates boosted interest incomes for lenders in the third quarter, but turbulent markets choked off dealmaking, and banks set aside more funds to brace for an economic slowdown.

The S&P 500 banks index was up 3.43 per cent.

Shares of Goldman Sachs, which will post results on Tuesday, were up 1.96 per cent, following reports of a plan to combine its investment banking and trading businesses.

Big megacap growth stocks such as Apple, Meta Platforms, Amazon.com and Tesla added between 2.5 per cent and 7.6 per cent as the benchmark 10-year yield fell for the first time in three days.

— Additional reporting: Reuters/PA