Signs of easing inflation in US boosts investors’ confidence

European shares hit all-time highs for the eighth day in a row as strong earnings and signs of easing inflation in the United States boosted investors' confidence.

DUBLIN

Paddy Power and Betfair owner Flutter Entertainment held investors' focus a day after announcing first-half results showing revenues doubling to £3.1 billion.

The global gambling giant’s shares added 0.09 per cent to €165.90 in Dublin, but dealers pointed out that this was not “the full story” as they gained 1.25 per cent to close at 14,125 pence sterling in London.

News that US lawmakers had passed its landmark $1 trillion infrastructure spending bill boosted construction materials stocks.

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Index heavyweight and building materials giant, CRH climbed 2.6 per cent to €45 while insulation specialist Kingspan gained 1.62 per cent to €95.62. Both have substantial businesses in the US.

Banks also gained on generally strong sentiment. AIB closed 3.58 per cent up at €2.43 while Bank of Ireland added 3.84 per cent to €5.242.

LONDON

The value of food delivery company Deliveroo’s orders doubled in the first half of the year, but shareholders remained unimpressed with the improved numbers. Its shares dropped 22.1p, or 6.1 per cent to 341p — wiping out some of the gains made following the news Delivery Hero had bought a 5 per cent stake in the firm.

UK cybersecurity company Avast climbed 3.1 per cent to 586p after US rival NortonLifeLock Inc agreed to buy the company for up to $8.6 billion.

Paypoint shareholders celebrated as Ofgem announced it was closing an investigation into whether the company broke competition laws over its energy top-up business.

The company made commitments to the regulator and has promised to pay £12.5 million into a voluntary fund administered by officials. Shares closed up 2.7 per cent at 610p.

Insurance giant Prudential saw new business profits rise 25 per cent in the first half to £850 million. The Asia-focused life insurance firm saw shares close up 2.6 per cent, at 1,489.5p.

Rival insurer Admiral pledged to pay record dividend after reporting strong numbers, pleasing investors, who pushed its shares up 3.9 per cent to 3,584p.

EUROPE

Dutch bank ABN Amro gained 8.6 per cent to close at €11.57, putting at the top of the Europe-wide Stoxx 600, after it said it would resume dividend payments as an economic recovery helped a stronger-than-expected bounce in net profit.

Analysts are predicting a record 148.1 per cent jump in second-quarter profit for companies listed on the STOXX 600, as per Refintiv IBES data, versus a 104.3 per cent rise forecast at the start of the earnings season.

German submarines-to-car parts group Thyssenkrupp slid 5.4 per cent to €8.43 after it cut its full-year free cash flow outlook.

Shares in wind turbine maker, Vestas Wind Systems, fell 2.1 per cent to 242 Danish kroner as it cut its 2021 outlook after missing second-quarter operating profit forecasts on supply chain disruptions and higher costs.

European equities have eked out record highs recently, shrugging off worries about tighter monetary policy and a surge in the Delta variant of the coronavirus, particularly in Asia and the US.

US

The Dow Jones Industrial Average hit a record high on Wednesday, buoyed by data showing that growth in inflation appeared to have peaked.

Equipment makers Caterpillar and Deere, construction supplier Vulcan Materials and steelmaker Nucor rose between 2.1 per cent and 2.7 per cent, adding to sharp gains from the previous session on hopes of benefiting from infrastructure projects.

The US senate passed a $1 trillion bipartisan package late on Tuesday. Lawmakers are weighing a futher $3.5 billion spend to fight climate change and poverty, but this could face stiff opposition from Republicans.

The biggest gainers among the major S&P sectors were utilities, materials and industrials . – Additional reporting: Reuters