Rally in financials lifts European stocks

European stocks rose for the second time in three days as a rally in financial services companies and retailers offset declines in oil and gas firms. The Stoxx Europe 600 Index gained 0.2 per cent at the close. It had fallen 0.3 per cent in thin trading on Tuesday, extending losses in the final minutes before the close.

Energy shares fell the most in the index as oil declined for the first time in nine days.

Dublin

The Iseq finished the day up 22 points at 6,926 in line with its European peers. AIB was up 0.6 per cent at €5.12. The stock, which floated last month, was admitted on Tuesday to a series of FTSE indices under a fast entry provision. This has prompted a number of funds that track these indices to buy the share in recent days.

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Food group Kerry was probably the biggest mover of the day, jumping 2.6 per cent to €75.64 on foot of a bullish note from Deutsche Bank. Bank of Ireland bucked the euro-wide rally in financials by closing down 0.4 per cent at 23.8 cent. Drinks maker C&C closed up 0.5 per cent at €3.20 ahead a trading update and agm on Thursday while Ryanair tracked down 1.1 per cent to €18.12 in tandem with rivals despite the fall in oil prices.

London

Britain's major share index climbed higher on Wednesday, bolstered by buoyant housebuilders after a strong trading update from Persimmon, as strength in consumer staples underpinned gains.

The FTSE 100 ended up 0.1 per cent, while mid-caps gained 0.8 per cent. Persimmon gained 2.4 per cent after a robust trading statement which lifted peers as they absorbed a sign of resilience to pressures on the British consumer.

Persimmon said last month’s British general election had not impacted consumers’ demand for new houses, and sales rose 7 per cent for the first half.

Housebuilders Barratt Development and Taylor Wimpey also rose on the more optimistic tone struck by Persimmon over the state of demand for houses. Another top gainer was supermarket chain Tesco, up 3.8 per cent after forecast-beating sales figures from wholesaler Booker, which has been under scrutiny from investors since Tesco announced its plan to acquire it.

Gains in Tesco helped the consumer staples sector provide the biggest sectoral boost to the FTSE, adding 9.4 points to the index, while energy stocks weighed as oil prices retreated.

Drugmaker GlaxoSmithKline inched 0.2 per cent lower after Citigroup cut its rating on the stock to "neutral" from "buy", citing slowing HIV market growth.

Europe

Investors scrutinised the outlook for Italian bond yields closely on Wednesday after the European Central Bank bought more of that country’s debt than usual in its flagship asset-buying programme.

The ECB bought more than €2 billion of Italian and French bonds than it was supposed to in June, moving further away from a rule aimed at ensuring that its stimulus is evenly spread across the euro zone.

Électricité de France (EDF) dropped 1.3 per cent after HSBC downgraded the shares, saying recent gains had gone too far.

Enagas dropped 0.8 per cent after Deutsche Bank cut its rating to hold from buy. Shares in French carmaker Renault edged up after the carmaker struck a deal to buy a 49 per cent stake in Shenyang Brilliance JinBei Automobile company as part of its move to boost sales in China of light commercial vehicles.

New York

The S&P 500 and the Dow were little changed in choppy trading on Wednesday, with a fall in oil prices taking a toll on energy stocks, but the Nasdaq was propped up by gains in tech shares.

The tech sector led the S&P gainers with a 0.69 per cent rise, with Apple, Microsoft and Amazon lifting the sector. Tech stocks have been volatile in the past few weeks on concerns over the sector's valuation, after powering the S&P's record run this year.

“In a world of muted growth, tech stocks can still be attractive for delivering attractive rates of earnings growth . . . However, because of the positioning around tech, there is to be expected a period of consolidation,” said Marcelle Daher, senior managing director, asset allocation at Manulife Asset Management.

O'Reilly Automotive slumped as much as 19.9 per cent to a near three-year low after its second-quarter same-store sales missed its own estimates. The stock dragged down other auto-parts retailers with Autozone and Advance Auto Parts falling 9.4 per cent and 14 per cent. – (Additional reporting by Reuters/Bloomberg)