European shares closed slightly firmer after choppy trading yesterday, helped by a rally in US technology stocks while geopolitical concerns kept gains in check.
The FTSEurofirst 300 index of top European shares closed 0.2 per cent higher at 1,214.96 points after falling to a low of 1,204.77 points.
“We have seen some buying momentum in beaten-down stocks, but the market will continue to be dominated by the Syrian issue in the coming sessions,” Tom Robertson, senior trader at Accendo Markets, said.
“A limited US-led military strike is factored in but some investors also fear that the situation could dramatically change once the attack begins,” he said.
Yesterday, US President Barack Obama won backing for a strike from key Congress figures and Russia said it did not rule out agreeing to military action if Damascus were proven to have carried out a chemical weapons attack there.
However, a sharp drop in Italian equities on domestic political uncertainty and weaker travel stocks after a Ryanair profit warning limited the broader market’s gains.
Italy’s FTSE MIB fell 1.4 per cent on concerns over the government’s survival, with some papers saying former Prime Minister Silvio Berlusconi, who faces possible eviction from the Senate on a tax fraud conviction, was considering withdrawing his party’s support from the government.
Among sectoral movers, the STOXX Europe 600 Travel and Leisure index fell 1.6 per cent, the worst performer, after Europe’s biggest budget airline, Ryanair, said it could miss its annual profit target for the first time in a decade on lower demand and a weaker pound.
Ryanair shares fell 13.4 per cent.
“Uncertainty over a high oil price will mean further pain for under-pressure profit margins for any budget airline ... I’ve seen a lot of risk taken off the board simply because of the uncertainty surrounding Syria,” said Jordan Hiscott, trader at Gekko Global Markets.
Crude oil prices have surged more than four per cent in one week.
Technical analysts said the stock market would remain supported at some key levels.