Rising Covid cases rattle European markets
European shares fell on Thursday as rising Covid-19 cases across the continent rattled economically-sensitive sectors like travel, leisure and banks. Mixed earnings reports from some companies also weighing on sentiment.
The pan-European Stoxx 600 index slipped 1 per cent, with the oil and gas sector falling 2.7 per cent to a six-month low as crude prices dropped.
The Iseq overall index declined by 0.5 per cent to 8,078.63, with ferries operator Irish Continental Group (ICG), off 5 per cent at EUR4.50, and Dalata Hotel Group, down 3.3 per cent at EUR3.63, among the main decliners.
Banks were also out of sorts, with Bank of Ireland falling 1.2 per cent to EUR4.22, while AIB declined by 0.9 per cent.
However, Glanbia stood out as a bright spot, jumping 5.1 per cent to EUR14.65, after the nutrition group reported better-than-expected results for the first half of the year and raised its full-year earnings forecast.
Venture capital firm Draper Esprit jumped 7.7 per cent to EUR10.50 as a fundraising round at Revolut, the instant payments company in which it is invested, valued the business at GBP24 billion (EUR28bn). This values Draper Esprit’s holding at GBP119 million, some GBP99 million above the stake’s estimated fair value as of March.
Housebuilders were on offer, with Cairn Homes down 3.4 per cent at EUR1.07, while Glenveagh Properties declined by 1.5 per cent to 95 cent.
The FTSE 100 marked its worst day in a week, falling 1.1 per cent, dragged down by pharmaceutical and energy stocks.
The drugmakers sector fell 2.9 per cent, with AstraZeneca and GlaxoSmithKline among the worst performers.
UK-listed cybersecurity group Avast jumped 18.1 per cent after revealing it was in advanced talks over a merger with peer NortonLifeLock Inc.
Bank of England governor Andrew Bailey said the central bank would assess inflation data for things that could be temporary before taking a call on raising rates, while a roaring jobs market in June also showed growing inflation pressures from rising wages.
Energy sector dropped, with oil majors Royal Dutch Shell and BP down 2.4 per cent and 2.9 per cent respectively.
Norwegian independent oil and gas firm Aker BP fell 2.8 per cent after it posted weaker-than-expected second-quarter operating profit.
US shares were lower in early afternoon trading as a rally in growth stocks ran out of steam, while cyclicals gained as a fall in weekly jobless claims last week strengthened views about a recovery in the labour market.
Value-oriented sectors such as financials, industrials and materials led advancing stocks, as the Labor Department said initial claims for state unemployment benefits fell 26,000 to a seasonally adjusted 360,000 for the week ended July 10, a 16-month low.
The second-quarter earnings season began on a strong note this week, with the four largest US lenders, Wells Fargo , Bank of America, Citigroup and JPMorgan, posting a combined £33 billion in profits.
The S&P 500 banks index reversed early declines to rise by early afternoon, with Morgan Stanley standing out among gainers as it reported a better-than-expected quarterly profit.
Johnson & Johnson shares dropped on news the group is voluntarily recalling five Neutrogena and Aveeno brand aerosol sunscreen products in the US after detecting a cancer-causing chemical in some samples.
– Additional reporting, Reuters
- ^ Irish Continental (www.irishtimes.com)
- ^ Revolut (www.irishtimes.com)
- ^ Andrew Bailey (www.irishtimes.com)
- ^ Siemens (www.irishtimes.com)
- ^ Gamesa (www.irishtimes.com)
- ^ Mercedes-Benz (www.irishtimes.com)
- ^ Amazon (www.irishtimes.com)
- ^ Labor Department (www.irishtimes.com)
- ^ Federal Reserve (www.irishtimes.com)
- ^ Neutrogena (www.irishtimes.com)
- ^ Aveeno (www.irishtimes.com)
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