Business

European markets break losing streak amid central bank moves

Euro zone banks climb 2.5% after ECB intervention

The Wall Street subway station near the New York Stock Exchange: US equities rallied ahead of Fed announcement. Photograph: Angela Weiss / AFP

Wed Jun 15 2022 - 19:27

European stocks snapped their six-day losing streak on Wednesday after the European Central Bank (ECB) announced measures to temper a bond market rout, even as some investors looking for more decisive action were disappointed.

After an unscheduled meeting, the ECB said it would skew reinvestments of maturing debt to help more indebted euro zone members and would devise a new instrument to stop fragmentation of the bloc’s bond market.

Investors also awaited the policy decision of the US Federal Reserve, a hike of 0/75 percentage points, which came after the close of European markets.

DUBLIN

The Iseq rose almost 1 per cent as Irish stocks joined in with the rebound in equities seen across Europe. Packaging group Smurfit Kappa was one of the main climbers, rising 4.6 per cent to €33.86. Flutter Entertainment also had a good day, rising 4 per cent to €97.18, while Cairn Homes added 2.2 per cent to just below €1.02.

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Building materials group CRH rose 0.6 per cent to €34.21, while Bank of Ireland was boosted by better sectoral performance for euro zone banks, gaining 3.6 per cent to €6.27. But it was a sluggish day for Ryanair, which slipped 0.5 per cent to €11.94.

LONDON

London’s blue-chip FTSE 100 rose1.2 per cent and the mid-cap FTSE 250 index advanced 1.4 per cent after logging six straight sessions of losses amid fears of an economic slowdown.

Shares of Asia-focused bank HSBC gained 2 per cent to provide the biggest boost to the FTSE 100 index. WH Smith climbed 8.5 per cent to the top of the FTSE 250 index after the retailer’s quarterly revenue surpassed pre-pandemic levels.

The Bank of England will likely raise interest rates on Thursday by 25 basis points to 1.25 per cent and stick to those increments in coming meetings despite inflation running close to double-digits, according to a Reuters poll of economists.

Whitbread added 6.3 per cent after the Premier Inn owner reported higher first-quarter sales on a recovery in hotel stays in Britain and Germany. Bloomsbury Publishing jumped 2.2 per cent after the company reported a 40 per cent jump in annual profit.

EUROPE

The pan-European Stoxx 600 advanced 1.4 per cent following six straight sessions of losses on worries that aggressive US rate hikes will push the world’s largest economy into a recession.

An index of euro zone shares gained 1.6 per cent, bouncing off lows hit after the ECB statement. Euro zone banks climbed 2.5 per cent, but were off highs hit earlier in the session.

Italian bank stocks, which have been hit hard recently on fears about Rome’s surging debt costs, trimmed some gains, but were still trading 4.3 per cent higher as bond yields fell. The Dax in Germany and the Cac 40 in France both rose by about 1.35 per cent.

Among individual stocks, Swedish medical equipment maker Getinge slumped 17.5 per cent after cutting its sales forecast for 2022.

H&M, the world’s second-biggest fashion retailer, fell 6.5 per cent despite posting a bigger-than-expected rise in quarterly sales.

NEW YORK

Wall Street’s main indexes rose on gains in beaten-down growth and financial stocks in early trading on Wednesday even as investors braced for a bigger interest rate hike by the Federal Reserve to tame persistently high inflation.

Market heavyweights Tesla, Alphabet, Microsoft and Amazon added between 2 per cent and 4.2 per cent.

Citigroup rose 3.3 per cent to lead gains among the big banks, while Nucor Corp jumped 3 per cent after it forecast upbeat current-quarter profit on strong steel demand.

Boeing surged 7.8 per cent after China Southern Airlines conducted test flights with a 737 Max plane for the first time since March, in a sign the jet’s return in China could be nearing as demand rebounds. — Additional reporting: Reuters

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