Business Irish

Sunday 25 March 2018

European stocks post first weekly gain since yuan devaluation

Permanent TSB on St. Stephens Green - shares in the bank were up 1.5pc
Permanent TSB on St. Stephens Green - shares in the bank were up 1.5pc

Bloomberg/Colm Kelpie

After wild swings over the past few days, European stocks ended up posting their first weekly gain since China devalued its currency.

The Stoxx Europe 600 Index rose 0.3pc at the close of trading, adding most of those gains in the final settlement period.

An advance of 0.3pc in the first few minutes of trading gave way to losses of as much as 1pc as the session progressed, before the gauge moved higher.

But the Dublin index bucked the European trend. By the close, the ISEQ Overall Index was down 0.36pc or 22.97 points to end the trading week at 6,309.18.

The leaders on the Dublin market included drinks group C&C, which rose 1.3pc to €3.55, while Permanent TSB increased 1.5pc to €4.77.

On the other side of the board, the laggards included Glanbia, which fell 1pc, while Ryanair was down 2.1pc to €12.17.

The stocks 600 index had daily moves of 1.7pc or more in the past seven days as China's currency devaluation rattled markets. Despite the volatility, the Stoxx 600 ended the week 0.6pc higher.

"The market is just looking for some kind of guidance," said Christian Zogg, of LLB Asset Management in Liechtenstein.

"It's always the same. A heavy loss and then try to figure out what's really happening."

Investors are waiting for cues on the timing of a US rate increase from central bankers gathered at Jackson Hole, Wyoming, this weekend, said Mr Zogg. Traders' odds of a rate increase in September has dropped to 38pc, from about 48pc before China's move.

The Stoxx 600 plunged the most since 2008 on Monday. It then alternated between gains and losses until yesterday's first back-to-back advance in more than a week.

Europe's benchmark gauge is still heading for the worst month since 2011.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business