Marketing

Luxury goods, mining gains help European shares regain lost ground


European shares ended higher on Wednesday as positive earnings from the luxury goods sector and strong commodity prices helped investors momentarily look past concerns over rising interest rates.

Dublin

The Iseq index closed up 0.2 per cent to 8359.24 in Dublin on Wednesday with Paddy Power-owner Flutter among the best performers.

Flutter added 2.8 per cent to close at €134 after Davy reiterated its “outperform” recommendation on the stock on the back of the acquisition of Sisal.

Banks were in focus with news that the Irish State is no longer the largest investor in Bank or Ireland and as AIB-owned EBS said it was considering pulling back on its savings and current account products to focus on its mortgages business. Bank of Ireland was flat at €5.98, with AIB down 2 per cent to €2.56.

Airlines were weaker across Europe with Ryanair down 1.1 per cent to €16.22.

Other movers in Dublin on Wednesday included hotel groups Dalata and Irish Continental, which closed up 1.27 per cent and 0.7 per cent as fears over Omicron fade.

London

The FTSE 100 ended higher, aided by gains in miners and consumer staples, with strong profit forecasts from luxury brand Burberry and education group Pearson providing a further fillip to sentiment.

After falling as much as 0.5 per cent, the blue-chip FTSE 100 index reversed course to end 0.4 per cent higher, with major miners and consumer companies such as Diageo and Unilever among top gainers.

Burberry gained 6.3 per cent after the luxury brand said its annual profit would beat market expectations as the company’s full-price sales accelerated in the third quarter.

Pearson gained 4.4 per cent after it raised its forecast for full-year adjusted operating profit in a boost to management efforts to restructure the business.

Meanwhile, Unilever rose 4.5 per cent after the Dove soap maker said on Wednesday it would not increase its £50 billion proposal to buy GSK’s consumer healthcare business.

The domestically focused mid-cap index was flat, with WHSmith jumping 7.1 per cent on expectations of a resumption in the recovery of its travel markets even as the retailer said it was experiencing a “small impact” from the Omicron coronavirus variant.

Europe

The pan-European STOXX 600 index ended 0.2 per cent higher after falling 1 per cent in the prior session. Mining stocks were the best performers for the day, up 2.7 per cent as iron ore prices surged on signs of more stimulus in major importer China.

Cartier owner Richemont climbed 5.2 per cent as the world’s second-largest luxury group said robust demand for its jewellery and watches in the Americas and Europe helped quarterly sales rise by nearly a third. Other luxury stocks including LVMH, Kering and Hermes rose between 1.6 per cent to 3.7 per cent, lifting France’s blue-chip CAC 40 index.

ASML fell 2.4 per cent despite posting strong results, as the chipmaker said it has still not received permission to ship any of its most cutting edge lithography systems to China.

Wall Street

The Nasdaq index tumbled in early trading on Wednesday, on track to confirm a correction as it briefly shed more than 10 per cent from its record closing high on November 19th.

Other stock indexes rose, however, after upbeat results from a host of companies partially offset a wobbly start to the fourth-quarter reporting season.

UnitedHealth rose 2.5 per cent after the health insurer beat market estimates for quarterly profit on strong demand in its health insurance business.

Procter & Gamble gained 3.8 per cent as it raised its annual sales forecast, benefiting from resurgent demand for cleaning products due to a spike in Covid-19 infections.

Bank of America added 2.5 per cent on reporting a jump in fourth-quarter profit, while Morgan Stanley rose 2.7 per cent after posting quarterly earnings above market expectations.

Megacap growth companies, including Microsoft, Alphabet, Tesla, Meta and Netflix, rose up to 2 per cent.

Additional reporting: Reuters



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