European shares closed up on Monday, recouping some of the steep losses clocked last week with technology and financials leading gains, while Ryanair led a rout among airlines after reporting a quarterly profit slump.
The pan-European Stoxx 600 index closed 0.9 per cent higher, coming off a five-day losing run, a streak last seen in October 2023.
Most sectoral indexes closed higher, with technology shares adding 1.8 per cent, coming off their worst weekly drop in more than three years, as some chip stocks rebounded following the global sell-off seen last week when investors fretted over the prospects of possible US trade restrictions.
Dublin
Bucking the more positive trend, Ryanair shares fell 17.2 per cent to €13.62 after the airline’s profits slumped by almost half in the three months to the end of June as ticket prices plunged 15 per cent from the same period last year. The airline reported a 46 per cent fall in after-tax profit to €360 million – well below the €538 million profit forecast in a company poll of analysts – for what is the first quarter of its financial year.
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“Ryanair has informed markets that greater ‘price stimulation’ will be needed this summer – in plain language it’s pushed passengers past their limit and needs to roll back on the further price hikes it had anticipated making,” AJ Bell’s head of financial analysis, Danni Hewson, said.
The positive market bounce saw Bank of Ireland shares rise almost 3 per cent to €10.44. Rival AIB fell 0.6 per cent to €5.35.
Europe
China-exposed luxury firms such as LVMH, Kering and Hugo Boss advanced between 1.2 per cent and 4.3 per cent after Beijing surprised markets by cutting big short- and long-term interest rates, its first such broad move since August last year, signalling intent to boost growth in the world’s second-largest economy.
Political uncertainties in the United States, coupled with the chip sell-off had dragged the benchmark index to log its biggest weekly decline of 2024 last week. Lack of policy direction from the European Central Bank also added to investor concerns.
ECB policymaker Peter Kazimir opened the door to two more interest rate cuts by the end of the year, if data justified them.
Later in the week, some of the region’s largest lenders including Spain’s Santander, France’s BNP Paribas, Germany’s Deutsche Bank and Italy’s UniCredit are all slated to report their quarterly numbers throughout this week.
London
The London market was stronger on Monday after it rebounded from concerns over the Microsoft IT outage which disrupted a raft of industries. Disruption from the outage and Joe Biden’s decision to step down from the US presidential race did little to dampen trading at the start of the week.
Nevertheless, airline firms in London were notably lower after Ryanair’s announcement. The FTSE 100 finished 43.06 points, or 0.53 per cent higher, to end the day at 8,198.78. In company news, Ladbrokes and Coral owner Entain was in the green after the betting giant appointed Gavin Isaacs as its new chief executive.
Mr Isaacs, who was previously chairman of Games Global and was on the board of Entain’s US rival DraftKings, will join the sports betting giant on September 2nd.
Rentokil was the FTSE 100′s strongest riser following reports over the weekend that it is being targeted for a private equity-backed takeover.
New York
The S&P 500 and the Nasdaq recouped some of the previous week’s losses on Monday, as investors re-examined the chances of a second presidential term for Republican nominee Donald Trump after US president Joe Biden pulled out of the race.
Stocks firmed after a three-day sell-off, with megacaps such as Alphabet, Meta Platforms and Tesla gaining between 1.8 per cent and 3 per cent.
The information technology index topped sectoral gainers and was on track to snap a four-day losing streak.
Trump-linked stocks were mixed, with Trump Media & Technology Group dropping 2.4 per cent, while software firm Phunware gained 1.4 per cent.
Cybersecurity firm CrowdStrike slumped 12.9 per cent, set to extend losses after a software update from the company sparked Friday’s global tech outage. Delta Air Lines lost 1.9 per cent after cancelling more than 600 flights as it struggled to restore operations after the outage.
Nvidia rose 2.5 per cent after Reuters reported the AI chip leader was working on a version of its new flagship AI chips for the China market that would be compliant with current US export controls. – Additional reporting: Reuters
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