European markets calm while US frets over interest rates

European equities climbed for a third day, with investor confidence slowly coming back amid the calmest market in more than a year.

Dublin’s Iseq rose by 0.25 per cent but UK shares fell for the third time in four days. Miners were among the worst performers, as Glencore reported worse than estimated first-half profits.

Wall Street was also lower on Wednesday heading into the afternoon, led by declines in technology and defensive stocks as investors weighed up the possibility of a rate hike in the coming months.

Dublin

Bank of Ireland was among the strongest performers on the Iseq, which traded on thin volumes all day. The bank finished the session up 4.3 per cent, echoing the unusual calm that enveloped the European financial sector yesterday.

Dalata, the hotel group run by former Jurys boss Pat McCann, rose more than 5.4 per cent after it told investors it was working on a deal to take over as the operator of the DoubleTree by Hilton (the former Burlington Hotel) in Dublin. If the deal is completed, it would add a further 500 rooms to Dalata's estate in the booming Dublin market.

CRH was down 0.34 per cent ahead of its results on Thursday. Paddy Power Betfair also had a tough afternoon, down more than 2 per cent, despite posting improved performance across all four of its operating divisions.

Kenmare Resources finished down more than 3.5 per cent after its first half results showed a drop in revenues.

London

Glencore lost 3.1 per cent after reporting a plunge in first-half earnings. Last year’s collapse in commodity prices saw Glencore scrap its dividend and embark on a new strategy that includes selling assets and cutting costs.

Precious metal stocks were also under fire after the price of gold slipped 0.8 per cent. Gold miner Randgold Resources was the biggest faller on the market, dropping more than 5 per cent, while silver miner Fresnillo was down 4 per cent.

South African-focused firms were dealt a blow after the rand fell amid rumours the country's finance minister, Pravin Gordhan, could be arrested. Shares in Mediclinic International were down 43p to 1,025p, Mondi was off 25p to 1,574p, and Old Mutual dropped 8.1p to 196.4p.

Among other stocks moving on corporate news, advertising magnate WPP contributed the most to gains on a gauge of media shares, rising 1.9 per cent after posting better-than-expected first-half sales.

Europe

Europe's Stoxx 600 Bank was the biggest sectoral gainer, up 2 per cent. Italian lender UniCredit soared 8 per cent, making it the top Stoxx gainer, helped for a second day by talk that it might soon sell its stake in Polish unit Pekao Bank.

Commerzbank and UBS Group added at least 2.9 per cent. Sweden's Svenska Cellulosa surged 7.4 per cent after announcing that it will split into two listed companies spanning hygiene goods and forestry products.

Italian broadcaster Mediaset advanced 1.7 per cent after a report that at least two Chinese broadcasters are considering its Premium pay-TV dossier.

New York

US investors are nervously awaiting Federal Reserve chairwoman Janet Yellen's Friday speech in Jackson Hole, Wyoming, where she is expected to give a steer on the direction of monetary policy.

Recent hawkish comments from some Fed officials, including vice chairman Stanley Fischer, have raised expectations that Yellen might signal a hike in September, which has weighed on markets.

Heading into the afternoon, eight of the 10 major S&P 500 indexes were trading lower. The financial sector, which stands to benefit from higher rates, was flat.

The bigger decliners were utilities, consumer staples and telecom services, defensive sectors that have led Wall Street’s rally this year as expectations of a rate hike kept getting pushed out.

Express plunged 24.7 per cent after the apparel maker slashed its full-year earnings outlook.

Satnav maker Garmin was the top percentage loser on the S&P, falling 4 per cent after Goldman Sachs downgraded the stock.

– (Additional reporting: Bloomberg/Reuters/PA)