European shares end flat as Brexit talks enter endgame

European shares ended little changed on Thursday, as a surge in material stocks and Rolls-Royce helped counter downbeat business activity data from the region and Brexit trade deal uncertainty.

London's FTSE 100 reversed losses to hit a six-month high, up 0.4 per cent, with miners Rio Tinto, Glencore and Anglo American providing the biggest boosts on record iron ore prices and buoyant copper.

Rolls-Royce surged 16 per cent to top London’s blue-chip index, as well as the pan-European Stoxx 600 benchmark, after a report said it was considering a possible re-entry into the narrow-body jetliner market.

Keeping sentiment in check were cautious comments on a post-Brexit trade deal between Britain and the European Union.

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Significant gaps still remain on three main issues at the negotiations, EU officials said.

"We think that eventually some kind of a very limited deal will be agreed upon at the very last minute," said Teeuwe Mevissen, senior market economist at Rabobank in Amsterdam, warning that there may not be too many details nor an overarching agreement.

DUBLIN

The Iseq index jumped 2 per cent to 7,339 to close at a near 11-month high. Ryanair rose 2.6 per cent to €16.22 after confirming it will buy 75 more Boeing 737 Max jets from the US manufacturer, bringing its total order for the aircraft to 210, worth a total of $22 billion.

The order comes just a day after the first commercial passengers flew on a 737 Max since it was restored to service by American Airlines.

Another driver was PaddyPower Betfair owner Flutter Entertainment, which climbed 6 per cent to €156.65 after announcing a €3.4 billion deal to take control of US business FanDuel. Dublin-headquartered Flutter said that it will boost its stake to 95 per cent by buying Fanduel's minority shareholder Fastball Holdings' shares.

Bank of Ireland and AIB rose by 3.1 per cent and 1.7 per cent respectively as the economic outlook brightened across Europe on foot of the latest Covid-19 vaccine news. Building materials giant CRH rose 1 per cent to €33.93.

LONDON

The London markets edged higher despite a surge in the pound as traders clung hopefully on to speculation that the UK could be nearing a deal with the EU. Minister for Foreign Affairs Simon Coveney said there is still a "good chance" a deal can be done, sparking hopes significant progress is around the corner.

Currency and equity markets were both optimistic as a result. The FTSE 100 closed 26.88 points higher at 6,490.27 at the end of trading on Thursday. A rally in mining stocks particularly helped to buoy the FTSE 100, with Rio Tinto, Anglo American, Glencore and BHP Group all making progress.

In company news, supermarket giant Sainsbury's rebounded after it became the latest grocery chain to commit to returning its business rates relief to the government.

It saw shares rise 8.7p to 218.6p after it committed to returning business rates relief worth around £440 million, after rivals Tesco and Morrisons made similar moves on Wednesday.

EUROPE

The Stoxx 600 has recovered about 45 per cent from March lows, with November’s bumper rally lifting it from a downtrend, but it still remains close to 10 per cent below its highs this year.

While Europe looks to expected monetary policy easing from the European Central Bank next week, in the United States there were early signs that a $908 billion bipartisan proposal could be gaining traction as a negotiating tool for fresh relief for the pandemic-hit economy.

"The key message [from the ECB] will be that [it] is committed to administering its medicine for a long time, even as the economy gets back to health," said Andrew Kenningham, chief Europe economist at Capital Economics.

NEW YORK

The S&P 500 and the Nasdaq touched all-time highs on Thursday as investors looked past bleak economic data, while remaining focused on a Covid-19 vaccine, with the blue-chip Dow getting a boost from Boeing shares.

Boeing jumped about 7 per cent after Ryanair ordered 75 additional 737 MAX jets with a list price of $9 billion, throwing a commercial lifeline to the embattled US planemaker.

Tesla’s 4 per cent gain underpinned the Nasdaq after Goldman Sachs upgraded the stock to “buy” in the run-up to the electric car maker’s addition to the S&P 500. Earlier in the day, data showed the number of Americans filing first-time claims for jobless benefits fell last week, but remained extraordinarily high at 712,000, while a separate survey showed US services industry activity slowed to a six-month low in November.

Progress in developing a working Covid-19 vaccine before the end of the year has driven the Wall Street’s main indexes to record levels recently. That also helped lift the S&P 1500 airlines index up 6 per cent.

Cruise operators Carnival jumped 8 per cent and Norwegian Cruise Line Holdings surged 9 per cent. Cloud-security provider Zscaler surged 25 per cent as it reported better-than-expected first-quarter revenue and adjusted profit.

Waddell & Reed Financial surged 49 per cent, extending gains from the previous session, after Australia's Macquarie Group announced a deal to buy the wealth manager for $1.7 billion.

– Additional reporting by Reuters