European shares started September on a firm footing yesterday after three months of losses as industrials rose and an update from Vivendi boosted media stocks.
A record plunge in pharma firm Indivior weighed on British mid-caps, however.
The Pan-European STOXX 600 index and eurozone blue chips both ended up 0.6%, helped in afternoon trading as the euro lost ground against the dollar.
Germany’ DAX gained 0.7% and Britain’s FTSE 100 rose 0.1%, though a near-40% slump in Indivior’s shares put pressure on the FTSE 250 which retreated 0.1%.
“There has been some stock-specific volatility, but overall I think the markets are still relatively well-supported by the low interest rate environment, so that’s probably going to be the case for the foreseeable future,” Laith Khalaf, senior analyst at Hargreaves Lansdown, said.
“While there is some ... negative sentiment towards markets, I think investors haven’t really got anywhere else to go because bonds are yielding very little and cash is yielding very little,” Khalaf added.
Indivior’s shares fell 36%, their biggest one-day loss on record, after the firm said it would appeal against a US court ruling that generic drug maker Dr Reddy’s had not infringed its patents, potentially opening the way to a rival to the firm’s Suboxone Film opiod addiction treatment.
On an otherwise relatively quiet day for corporate news, shares in Swedish vehicle maker Volvo jumped 7.3%, scoring their biggest one-day gain in more than four months after setting new financial targets.
Results drove some sizeable moves, with shares in French media firm Vivendi rising 5.2% after the group confirmed its outlook, reporting better than expected profit growth for the year. Europe’s media sector rose 0.9%.
“These results mean that investors are likely to believe management’s claim of a Canal+ turnaround and listen to music bulls even more,” analysts at Barclays said, upping their rating on the stock to “equal weight” from “underweight”.
French telecoms stock Iliad rose 2.2% on the back of robust first half earnings, which saw profit rise 22% thanks to winning new subscribers. Swiss security firm Dormakaba was another top riser, boosted 4.5% to an all-time high after Societe Generale began its coverage of the stock with a “buy” rating.
Pedestrians walk past the London Stock Exchange. The FTSE 100 rose 0.1% yesterday.
