European shares climb as investors hope for end to interest rate hikes

European shares closed higher on Wednesday as gains in mining stocks offset losses in Credit Suisse after its profit warning, while investors awaited minutes of the Federal Reserve and European Central Bank’s last policy meetings for clues on future interest rate hikes.

Government bond yields on both sides of the Atlantic dropped as data raised hopes that central banks can tame inflation and stop increasing interest rates next year.

Surveys showed US business activity contracted for a fifth straight month in November as higher interest rates slowed demand, but the downturn in euro zone business activity moderated slightly.

Dublin

The Iseq finished up 1 per cent, outperforming the major European indices, with the Dublin market boosted by a 3 per cent rise for Ryanair. The airline closed up at €13.07 on a day that also saw decent gains in London for EasyJet.

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Paddy Power owner Flutter Entertainment advanced, closing up 2.6 per cent at €137.00, while building materials group CRH added 0.75 per cent to €38.39. Packaging group Smurfit Kappa was also in the green, rising 0.85 per cent to €35.54.

But AIB slipped 0.5 per cent to just below €2.99, while Bank of Ireland finished at €7.52, down 2.4 per cent.

London

UK’s main stock indexes closed higher on Wednesday led by miners and industrials after a better-than-expected reading on business activity in November and as the UK Supreme Court ruled against a Scottish referendum vote.

The blue-chip FTSE 100 rose 0.2 per cent, while the domestically-focused FTSE 250 midcap index added 0.4 per cent.

The Supreme Court ruled the Scottish government cannot hold a referendum on independence without approval from the British parliament, dealing a blow to nationalists’ hopes of holding a vote next year.

Despite concerns about a potential recession, UK markets have recovered sharply from a sell-off in October on hopes the new government leadership will restore confidence in the country’s fiscal health.

Glencore gained 3 per cent after blank-check firm Metals Acquisition agreed to an amended agreement to buy the global miner’s Cobar copper mine in Australia.

British industrial group Rotork added 4.4 per cent on higher four-month revenue, while Pets at Home fell 5.1 per cent as the company said customers were buying fewer toys and other items for their dogs amid a cost-of-living squeeze.

Europe

The continent-wide STOXX 600 index rose 0.6 per cent to its strongest level since August 19th. Mining stocks extended gains for a second session, rising 1.8 per cent, while travel and leisure and retailers gained 1.9 per cent and 1.7 per cent respectively.

Credit Suisse slid 6.1 per cent after the embattled Swiss lender estimated a pretax loss of up to 1.5 billion Swiss francs (€1.53 billion) for the fourth quarter as wealthy clients make hefty withdrawals.

Among other stocks, EMS Chemie slipped 0.7 per cent after the Swiss nylon maker cut its full-year earnings forecast due to a worsening economic outlook.

Endesa shed 5.1 per cent after the Spanish power utility company forecast “disappointing” 2023-24 targets, citing high inflation and a new windfall tax in Spain.

US

The Nasdaq led gains among major Wall Street indexes in early trading as growth stocks rose after a mixed bag of economic data led to a drop in Treasury yields, while investors awaited minutes from the Federal Reserve’s last policy meeting.

Tesla jumped 5.6 per cent after analysts at Citigroup upgraded the electric-vehicle maker’s stock to “neutral” from a “sell” rating, while Nordstrom fell 5.4 per cent as the fashion retailer cut its profit forecast amid steep markdowns to attract inflation-wary customers.

Trading volume is likely to be thin heading into the Thanksgiving holiday on Thursday, with the US stock market open for a half-session on Friday.

Additional reporting: Reuters