European markets and the pound jumped higher after Rishi Sunak hailed his “decisive breakthrough” on post-Brexit rules and confirmed trade borders in the Irish Sea have been removed. Sterling rose against the US dollar shortly after the “Windsor Framework” was agreed between the prime minister and European Commission president Ursula von der Leyen. And UK markets were enjoying a resurgence after the FTSE 100 suffered several days of decline last week.
Global markets had taken a knock-back on Friday after new price index figures revealed US inflation unexpectedly ticked up last month, prompting expectations that the Fed will further hike up interest rates to control rising prices. But the post-Brexit deal provided some light relief for investors hoping for an end to the deadlock over the Northern Ireland protocol.
DUBLIN
The Iseq index of shares rose 2 per cent on the back of EU-UK deal on Northern Ireland. The gains were led by the three listed banks, AIB, Bank of Ireland and PTSB, which rose by 1.3 per cent, 2.8 per cent and 3 per cent respectively.
Paddy Power Betfair-owner Flutter, which said it could list its shares in New York by the end of the year depending on the outcome of talks with investors, rose by 3.7 per cent to €152.90.
Iseq heavyweight Ryanair rose 3 per cent to €15, while building materials firm CRH increased 1.8 per cent to €44.35. Insulation maker Kingspan, which is plugged into the US market, fell 2 per cent to €62.34.
LONDON
The UK’s FTSE 100 snapped a four-day losing streak on Monday as euphoria around upbeat earnings reports from Associated British Foods and Bunzl helped offset worries about high US interest rates.
The blue-chip FTSE 100 closed 0.7 per cent higher, after logging its worst weekly performance so far this year when Friday’s hotter-than-expected US consumer spending data sparked a selloff on both sides of the Atlantic.
However, UK stocks lagged behind their European peers on Monday owing to a firmer pound after British prime minister Rishi Sunak announced a deal with the EU to amend the original Northern Ireland protocol.
On the earnings front business supplies distributor Bunzl gained 2.5 per cent and hit a six-month high after raising annual dividend and reporting a higher full-year profit. Primark owner climbed 1.4 per cent and touched a one-year high after the food processing company raised its full-year outlook.
Rolls-Royce topped the FTSE 100 with 6.6 per cent gains and hit an over one-year high, rising for three straight sessions, as Jefferies raised its price target on the jet engine-maker’s stock following an upbeat 2023 profit outlook last week.
EUROPE
European retailers rose 2 per cent, led by a 4.2 per cent increase in shares of Hennes & Mauritz.
Headline price pressures in the euro zone have shown signs of easing recently but the European Central Bank is still expected to hike rates in March on worries that inflation could be stickier than markets were expecting.
Nonetheless, the Stoxx 600 has outperformed the S&P 500 index so far this year, boosted by recent data showing an improving economic outlook and by China’s reopening. Commerzbank celebrated its return to Germany’s Dax with a climb of 4.6 per cent, from which the country’s number two lender was removed in 2018.
Dechra Pharmaceuticals tumbled 9.2 per cent to the bottom of the Stoxx 600 as the veterinary drugs-maker warned its full-year operating profit would be at the lower end of analysts’ expectations. Italy’s UniCredit added 4.6 per cent on its inclusion to the Euro Stoxx 50 index
NEW YORK
US stocks rose on Monday as investors hunted for bargains after the main benchmarks logged their biggest percentage declines of the year on worries about the impact of a tighter monetary policy.
The blue-chip Dow erased its gains for the year in Friday’s selloff and the benchmark S&P 500 posted its third straight week of losses on fears that a strong economy and high inflation will give the Fed more room to raise rates. The three main indexes climbed about 1 per cent after the opening bell on Monday but gave up some gains by afternoon as defensive sectors such as utilities and consumer staples stocks fell.
Growth stocks rebounded, with Tesla up 4.1 per cent after the electric automaker said its plant in Brandenburg near Berlin was producing 4,000 cars a week, three weeks ahead of schedule according to a recent production plan reviewed by Reuters.
Data earlier showed new orders for key US-made capital goods increased more than expected in January, while shipments of the so-called core goods rebounded, suggesting that business spending on equipment picked up at the start of the first quarter.
Seagen surged 10.5 per cent after the Wall Street Journal reported that Pfizer was in early talks to acquire the biotech firm. Pfizer’s shares slipped 1.1 per cent. – Additional reporting by Reuters
