Business World

Sunday 18 August 2019

European shares cling to five-month high

European stocks held at five-month highs yesterday. Photo: AFP/Getty Images
European stocks held at five-month highs yesterday. Photo: AFP/Getty Images

Kit Rees/Reuters

European stocks held at five-month highs yesterday, ending October with a 1.8pc monthly gain, the second in a row, as third-quarter data fuelled confidence in the resilience of equity markets.

The pan-European STOXX 600 index closed 0.4pc with most bourses and sectors ending in positive territory as fresh data showed the Eurozone grew faster than expected last quarter and unemployment fell to its lowest in almost nine years.

"This Eurozone data provided a foundation on which Eurozone equities have built small gains," IG chief market analyst Chris Beauchamp commented.

He noted however that with Germany's Bourse closed on a bank holiday, "there is a feeling that investors are going through the motions".

Spain's IBEX posted its best monthly performance since May and closed the day 0.7pc higher after Catalonia's ousted leader, Carles Puigdemont, agreed to a snap election called by Spain's central government to end the crisis created by the region's bid for independence.

Early trading was lifted by heavyweight oil major BP, whose shares jumped more than 3pc to their highest level since July 2014 after its third-quarter profit beat expectations and it announced a share buy-back programme.

"We were expecting this to begin some time in 2018 and today's announcement is a very positive surprise," UBS analysts said in a note.

BP shares closed 1.7pc higher and the energy index was up 0.8pc. The sector has struggled in 2017 and is still down very slightly in the year to date.

"With the energy sector offering close to the highest premium of dividends to the market for nearly 30 years, this should in turn lead to a re-rating," UBS said.

Irish Independent

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