Business

Shares jump on positive earnings reports from European banks

Iseq index underperforms, adding just 0.3% amid slump in Ryanair shares

The UBS bank in Switzerland reported a return to profit on Tuesday after two loss-making quarters. Photograph: Stefan Wermuth/Bloomberg

Ian Curran
Tue May 7 2024 - 17:17

European shares hit a more-than-one-month high on Tuesday, as a slew of positive corporate earnings, particularly from the banking sector, added to the upbeat sentiment surrounding interest rate cuts.

Dublin

The Iseq index advanced by 0.3 per cent, underperforming European indices after a sharp drop-off in Ryanair’s share price.

The airline fell 5.6 per cent to close the session at €19.11 after chief executive Michael O’Leary said he expects summer ticket prices to be lower than previously estimated as the airline industry suffers from grounded planes and a supply chain backlog. “Looking at summer ... We thought pricing would be up 5-10 per cent. We’re heading to flat (pricing year-on-year) to 5 per cent up, which is surprising with a lot of the Airbus fleet grounded for maintenance,” he told reporters in Brussels.

Euronext Dublin, as the Irish market is known, was otherwise mostly in green with big moves by the main banks on foot of similar gains by lenders across the Continent. Bank of Ireland advanced by more than 6 per cent to €10.73 per share while AIB added almost 4 per cent to close at €5.14 per share. PTSB, meanwhile, shed 2 per cent to €1.47 per share with its first quarter trading update to follow on Wednesday morning.

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A volatile session for shares in Smurfit Kappa saw the cardboard boxmaker close at €43.78 per share, a gain of 0.8 per cent, amid reports that its rival International Paper is the subject of a $15 billion (€13.9 billion) bid by Brazil’s Suzano.

London

The UK’s FTSE 100 cruised to a record high on Tuesday, coming off an extended weekend, boosted by Shell’s jump on its plans to sell some Malaysian assets, while BP slipped after it missed earnings forecast. The blue-chip index advanced by 1.1 per cent while the mid-cap FTSE 250 gained 1.3 per cent.

Shell jumped 1.3 per cent after Reuters reported the energy giant is in talks to sell its gas station business in Malaysia to Saudi Aramco, a day after the company said it would exit South Africa’s downstream businesses. BP, meanwhile, slipped 1.3 per cent after the oil giant missed forecasts due to lower oil and gas prices and a US refinery outage, but maintained the rate of its share buyback programme.

Precious metal miners gained 2.1 per cent after the demand for safe-haven assets increased as a ceasefire in Gaza remains uncertain.

Surveys showed British consumer spending softened in April, turning all eyes to the Bank of England’s interest rate decision later this week.

Europe

The pan-European Stoxx 600 index was up 1.1 per cent – after closing at a one-week high on Monday – fuelled by increased bets of rate cuts by the Federal Reserve and the European Central Bank this year. The blue-chip Stoxx 50 also advanced by 1.2 per cent.

UBS jumped 8.4 per cent after the lender’s first quarterly profit since taking over Credit Suisse was three times analysts’ expectations.

The financial services index climbed 2.1 per cent to a three-week high, leading sectoral gains.

Meanwhile, shares in chip manufacturer Infineon climbed 12.6 per cent after better-than-expected second-quarter sales, with analysts expecting long-term growth despite a full-year guidance cut.

Spirits makers Remy Cointreau and Pernod Ricard jumped 5.6 per cent and 2.7 per cent, respectively, after Chinese President Xi Jinping’s said China maintains “open attitude” towards a trade dispute over French cognac.

New York

US stocks remained close to their highest levels in about a month, with investors at a crossroads about how much further the market can sustain the rebound from April’s sell-off. The Nasdaq Composite, Dow Jones Industrial Average and S&P 500 indices were all ahead by around 0.2 per cent in early afternoon trading in New York.

Peloton soared after CNBC reported that a number of private equity firms have been considering a buyout of the fitness company. Walt Disney tumbled on a weak subscriber outlook.

Apple remained higher after unveiling a bigger version of its iPad Air.

Traders continued to keep an eye on “Fedspeak” after officials last week kept interest rates unchanged at the highest levels since 2001. – Additional reporting: Reuters, Bloomberg

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times

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