Business World

Wednesday 21 February 2018

European shares up as Sainsbury beats forecasts

Boards showing the currency exchange rates of the US dollar and the Euro against Turkish lira are on display at a currency exchange office in Istanbul, Turkey. Photo: Reuters
Boards showing the currency exchange rates of the US dollar and the Euro against Turkish lira are on display at a currency exchange office in Istanbul, Turkey. Photo: Reuters

European shares rose early yesterday, with retail stocks back in focus after a well-received update from British grocer Sainsbury, though shares in aerospace group Cobham tanked on disappointing profits.

The pan-European STOXX 600 index was up 0.2pc in early trading, while the blue-chip FTSE-100 hit a record high of 7,289.79, up 0.2pc, and was headed for the best winning streak in its history.

"The FTSE has not exploded higher, it has inched higher," said Michael Hewson, CMC Markets analyst.

Sainsbury's was among the top European gainers, jumping 5.5pc early in the session to reach its highest level since May, after Britain's second-biggest supermarket beat forecasts for underlying sales in its Christmas quarter.

This followed peer Morrison's strong performance in the previous session after it too reported robust figures.

"UK supermarkets seem to be in rude health following bullish statements from both Morrison's and Sainsbury's," said IG analyst Josh Mahony.

In Ireland, the ISEQ Overall Index was 0.5pc higher at 6,637.14 by mid-afternoon.

Shares on the move included CRH, which was up 1.5pc at €32.77 in advance of a speech by US President-elect Donald Trump during which he was expected to give more details about his plans for the US economy.

Mr Trump's campaign calls for tax cuts and more infrastructure spending have boosted US shares and the dollar.

Bank of Ireland was 1.2pc higher at 25 cent, while Green REIT was down 1pc at €1.34.

By mid-afternoon, the UK's FTSE-100 was 0.5pc ahead. Germany's DAX was 0.7pc higher and France's CAC-40 was up 0.45pc.

Danish bioscience company Chr Hansen was top of the STOXX, gaining 5.4pc on consensus-beating first-quarter earnings.

British aero engineering firm Cobham weighed on the STOXX, slumping more than 15pc, after it missed its profit target and scrapped its final dividend.

Cobham's 2016 trading profit fell short of a target it had cut just two months before the end of the year because of poor trading. It was headed for its worst day ever.

Shares in Tullow Oil were down 1.7pc as it unveiled preliminary annual results and said that long-standing chief executive Aidan Heavey will step down from the role in April. Chief operating officer Paul McDade will succeed him.

Mr Heavey will remain as non-executive chairman for up to two years.

(Reuters)

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