Markets

European equities edge up despite pressure on energy stocks

Release of US inflation data expected to be key market event this week

The floor of the New York Stock Exchange. Photograph: Michael Nagle/Bloomberg

Mon Aug 9 2021 - 18:59

European stocks were little changed but reached a record high after healthcare, utilities and technology gains outweighed declines triggered by a fall in commodity prices earlier in the session. Oil prices remained under pressure.

Investors will expected to keep a firm eye on US inflation data this week to see if the numbers make a case for an early tapering announcement by the Federal Reserve, the odds of which were cemented after a strong jobs report.

Trading volumes are expected to be thin as traders head for summer holidays.

DUBLIN

The Iseq closed flat on a day of few major moves for its key stocks. Ryanair was sluggish, declining 2 per cent to €16.47, while the opposite was the case for packaging group Smurfit Kappa, which climbed 0.9 per cent to €47.80.

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CRH, the largest stock on the index, closed 0.2 per cent higher at €43.20 on a day when peer HeidelbergCement declined after an analyst downgrade.

AIB shed 0.3 per cent to €2.28, while Bank of Ireland added 0.3 per cent to €5.12. Paddy Power-owner Flutter Entertainment rose 1.3 per cent to €152.70 albeit on low volume, while insulation-maker Kingspan dropped 0.7 per cent to €91.48.

LONDON

The FTSE 100 index nudged up about 0.1 per cent, while the mid-cap FTSE 250 index closed flat on Monday amid mixed performances for stocks.

Oil majors Royal Dutch Shell and BP slipped about 1 per cent each as crude prices fell more than 2.5 per cent on fears that pandemic-led curbs in Asia, particularly China, would dent fuel demand.

Miners also fell on weaker metal prices after data showed China’s export growth unexpectedly slowed in July.

But food delivery company Deliveroo jumped 4.5 per cent after Germany's Delivery Hero took a 5.09 per cent stake in the stock, while inhaled medicines specialist Vectura rose 5.5 per cent after US tobacco company Philip Morris raised its bid for the company.

Among decliners, Hargreaves Lansdown fell 11.3 per cent even after posting higher annual underlying earnings as Britain's biggest fund supermarket said it did not expect equity trading volumes to remain at high levels.

EUROPE

The pan-European Stoxx 600 index rose 0.2 per cent to a closing high of 470.68 points, powered by rises in the defensive sectors of utilities and healthcare. Technology stocks rose 0.5 per cent.

In Germany, the Dax slipped 0.1 per cent, while in France the Cac 40 also edged into the red as French energy major Total joined in the subdued performance for oil stocks.

HeidelbergCement, the world's second largest cement maker, fell 2.9 per cent after analysts at Barclays downgraded the German stock to "underweight", citing muted earnings growth due to inflationary pressures.

On Friday the Stoxx 600 capped its best week since mid-March on the back of a flurry of deal-making and strong earnings.

US

The S&P and the Dow Jones indexes retreated from record highs in the first half of the session as energy and other sectors sensitive to economic growth tumbled on concerns over rising Covid-19 cases.

Freeport-Mcmoran, the world's largest publicly-traded copper producer, slipped 1 per cent.

Sanderson Farms gained 7.2 per cent after it agreed to be bought for $4.53 billion by commodities trader Cargill and investment firm Continental Grain Co at a time when meat prices have been soaring due to strong demand. Tyson Foods gained 7.8 per cent after the meat processing company raised its forecast for fiscal 2021 revenue.

A stellar earnings season has seen US stocks surge to record highs over the past two weeks as several consensus-beating results from major firms reinforced faith in a post-Covid economic recovery this year.

As of Friday, analysts expected second-quarter profit growth of 93.1 per cent for S&P 500 companies, according to IBES data from Refinitiv.

– Additional reporting: Reuters

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