Datalex and bank shares shine in Dublin as European shares rally

European stocks rallied Wednesday from a sell-off in the previous session, with healthcare stocks boosted as AstraZeneca agreed to buy a rare-disease drugmaker and wider sentiment helped by an upbeat earnings outlook from chip equipment maker ASM.

Datalex and banking stocks stood out among the main advancers in Dublin.

The pan-European Stoxx 600 index rose 0.6 per cent, recovering some of the ground lost on Tuesday as the benchmark index plunged 2.2 per cent. The Iseq overall index in Dublin edged 0.2 per cent higher to 8,475.64.

Dublin

Bank of Ireland gained 2 per cent to €5.10 and AIB advanced by 3 per cent to €2.36, tracking gains by UK peers amid rising speculation about when the Bank of England will raise interest rates to tackle inflation. Banks generally perform better in a higher interest rate environment.

Datalex jumped 2.9 per cent to 70c as the market digested news that Lufthansa has been ordered by an international arbitration court to pay the Irish travel retail software provider €823,000, plus interest and some expenses, for services provided to the German airline group prior to the implosion of their working relationship two years ago. The hope, for investors, is that this bodes well for Datalex in a wider legal battle between both companies.

Origin Enterprises gained 1.5 per cent to €3.13. The agri-services group reported higher profits and revenues for the year to the end of July compared with the “challenging” previous 12-month period.

Cairn Homes moved 0.9 per cent higher to €1.14 and rival Glenveagh Properties rose 1.5 per cent to €1.11, helped by a bullish note from Bank of America analysts on Irish housebuilding earlier in the week.

London

London’s FTSE 100 ended higher. AstraZeneca rose 4.2 per cent and was the top boost to the blue-chip FTSE 100 after the pharmaceutical company said its newly-acquired Alexion division would buy the remaining equity in Caelum Biosciences in a deal that could be worth up to $500 million.

Banks were also in demand. HSBC advanced 2.1 per cent, while Investec, Natwest Group and Lloyds rose between 0.7 per cent and 2.2 per cent.

Clothing retailer Next rose 3.9 per cent after raising its full-year profit guidance. Upper Crust owner SSP Group fell 5.4 per cent over a slow recovery as sales remained at half of the pre-pandemic levels.

Morrisons gained 1.4 per cent on report that a $9.5 billion takeover fight for the British supermarket will be decided at an auction on Saturday.

Europe

ASM International jumped almost 3.9 per cent, a day after it raised its third-quarter order intake guidance.

After smooth gains in the past seven months, stock markets have faced volatility in September with investors nervous about major central banks withdrawing pandemic-era stimulus amid signs of higher inflation. A recent surge in commodity prices, supply-chain constraints, the Evergrande debt crisis and a power crunch in China have all hurt global growth sentiment.

Meanwhile, the oil and gas index slipped back from over one-year highs as a recent rally in crude prices petered out following an unexpected build in US inventories.

Royal Mail dropped 8.8 per cent after UBS downgraded the stock to sell from buy.

New York

Gains in defensive shares and Boeing helped the Dow and the S&P 500 index recover some lost ground on Wednesday after concerns over inflation and rising Treasury yields sparked one of Wall Street’s worst sell-offs this year.

Boeing’s shares rose after the saying its 737 Max test flight for China’s aviation regulator last month was successful and the aircraft maker hopes a two-year grounding will be lifted this year.

The US Congress has until Friday before the federal government begins shutting many of its operations unless Democrats manage to pass a Bill providing new funding for the fiscal year that begins on Friday.

Among other stock movers, Dollar Tree jumped after the discount retailer boosted its share buyback plan to a total of $2.5 billion. – Additional reporting: Reuters