Shares edge higher as relative calm reigns over markets

European stocks closed higher on Monday after last-minute gains, with buying focused largely on defensive sectors amid plummeting oil prices and continued anxiety over the coronavirus.

US stocks rallied as investors saw glimmers of optimism in efforts to deliver rapid virus testing.

Dublin

The Iseq rose by just over 0.5 per cent, broadly in line with the performance of other European bourses.

The main banks were hammered after dropping their dividends in line with a call by the European Central Bank. AIB fell 9.5 per cent to €1.01 while Bank of Ireland finished the session at €1.79, down 8.1 per cent.

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Recruiter CPL Resources fell 8.9 per cent to €5.60, as the extent of the decimation of the employment market by the Covid-19 crisis worried investors.

Kerry Group rose 5.4 per cent to €102.80, as the food group announced that it is pressing ahead with its agm next month.

Ryanair fell 1.4 per cent to €9.11, as it failed to get any traction from collapsing fuel prices.

London

The UK's exporter-heavy FTSE 100 closed 1 per cent higher, helped by a jump in AstraZeneca's shares and a weaker pound, but the prospect of a prolonged coronavirus-led shutdown in Britain weighed on midcap shares.

AstraZeneca gained 4.4 per cent after US regulators approved its treatment against an aggressive type of lung cancer in previously untreated patients. A weaker pound following a Fitch's cut to Britain's sovereign debt rating also helped the big dollar earners on the index.

Dundrum Town Centre operator Hammerson, which runs an array of shopping centres in the UK and Ireland, slid 22 per cent to the bottom of the midcap index after it suspended its final dividend and said the outbreak would have a material impact on its earnings.

Shares in aerospace suppliers Rolls-Royce, Meggitt and Senior fell between 12 per cent and 14 per cent after another bearish call from JPMorgan. The US bank, which assumes a 38 per cent drop in global air traffic in 2020, cut earnings estimates for the sector.

The wider travel and leisure index fell 1.6 per cent, with low-cost airline easyJet sliding 7.2 per cent after revealing it had grounded its entire fleet and furloughed cabin crew for two months under a government retention scheme.

Europe

The pan-European Stoxx 600 index closed up 1.1 per cent, having dropped about 1 per cent earlier in the day. A stronger open on Wall Street, spurred by optimism over battling the outbreak’s economic impact, also lent support late in the European session.

The healthcare sector was the biggest boost to the Stoxx 600, closing about 3 per cent higher as fears of the coronavirus kept investors trading cautiously. Utilities and telecom stocks also rose on the day.

Belgian-Dutch biotech company Galapagos jumped about 6 per cent after Jefferies upgraded the stock to 'buy', citing potential in the firm's lead product.

Bank stocks slumped 3.1 per cent as lenders complied with the European Central Bank’s call to freeze dividends in a bid to shore up credit, with the pandemic causing a liquidity squeeze across the bloc.

Spain’s bank-heavy Ibex index dropped 1.7 per cent.

New York

The S&P 500 index climbed for the fourth time in five days even after a weekend full of negative pandemic news as US president Donald Trump extended recommendations aimed at inhibiting the spread.

All of the major S&P sectors, however, were higher with technology stocks providing the biggest boost. The healthcare sector was the second-biggest support to the benchmark index as progress on coronavirus vaccines and tests being developed by Johnson & Johnson and Abbott Laboratories lifted their shares by about 6.7 per cent and 7.3 per cent, respectively.

Abbott Laboratories’ surge came after it unveiled a five-minute coronavirus test and Johnson & Johnson announced a vaccine candidate for the virus. – Additional reporting: Reuters/Bloomberg