Monday 23 October 2017

Airlines rise after Air Berlin collapse

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)

Reuters

European shares rose modestly yesterday, recovering further as geopolitical tensions eased in holiday-thinned trading, with airlines supporting gains after Air Berlin filed for insolvency, prompting a rush from Lufthansa and peers to snap up its assets.

The pan-European Stoxx 600 index was up 0.1pc, with gains capped by a drop in the basic resources and energy sectors after oil prices gave up earlier gains.

Travel and leisure stocks led gains after Germany's second largest airline, Air Berlin, filed for insolvency, its shares plummeting 32pc. Gulf carrier Etihad pulled its financial support for the airline.

Lufthansa was the best-performing European stock, up 4.7pc, with low-cost rivals EasyJet and Ryanair hot on its heels, after the German government said Lufthansa and another airline were in talks to take over some of Air Berlin's assets.

Health stocks and financials were among the biggest contributors to gains, with banks trading up 0.2pc.

The bank sector was hit particularly hard in the latter part of last week as tensions rose between the United States and North Korea.

Ireland's ISEQ Overall Index jumped 1.65pc to 6,783.21, spurred by the sharp rise in Ryanair's shares.

The airline's shares soared 3.4pc to €19.23, a record, as Air Berlin collapsed.

Shares in AIB rose 3.5pc to €5.05, while Cairn Homes rose 3.1pc to €1.63. Permanent TSB was 1.2pc lower at €1.92.

The UK's FTSE edged 0.4pc higher yesterday. Germany's DAX was rose 0.1pc and France's CAC-40 was up 0.3pc.

Danone gained 1pc after a media report that the activist fund Corvex Management owned a stake in the French yoghurt maker.

Irish Independent

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