European stock rise strongly after week of recession worries

European stocks rose strongly on Monday after a sharp sell-off last week on recession worries, while gains in French shares were capped after President Emmanuel Macron lost an absolute majority in the country’s parliamentary election. US markets were shut on Monday for the Juneteenth holiday.

Dublin

Kingspan’s shares tumbled 11.4 per cent after the insulation specialist warned of a major deterioration in market conditions as the global economy falters. It noted order intake volume was down significantly in May and June. But the group also indicated it expects to report a record half-year trading profit of about €415 million later this year.

CRH also saw its shares dip, falling almost 3.2 per cent over the session.

Banking stocks were higher, with AIB gaining almost 5.8 per cent to €2.492. Bank of Ireland’s gains were more muted, at 0.3 per cent, while Permanent TSB climbed 0.75 per cent.

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Ryanair shares were up 5.3 per cent at the close of the session, finishing at €12.41, while Dalata Hotel Group saw an 0.67 per cent increase in its share price to €3.76.

Food groups Kerry and Glanbia declined 0.66 per cent and 0.71 per cent respectively.

London

London’s FTSE 100 rose on Monday, boosted by gains in financial and energy stocks, after the blue-chip index posted its third straight weekly drop on sluggish economic growth worries.

The blue-chip FTSE 100 index rose 1.5 per cent, with banks and oil majors BP and Shell 3.3 per cent each leading gains.

London’s main share index fell last week on escalating worries about a recession and bets of bigger interest rate hikes after a cautious raise by the Bank of England.

“This is a reprieve after the poor performance last week – it’s hard to find positive economic news and any rallies are expressions of relief that things haven’t got materially worse,” said Stuart Cole, head-macro economist at Equiti Capital.

Focus is now on UK consumer price index data due on Wednesday and PMI, as well as retail sales readings due later this week.

“It would take a brave person to suggest the outlook is looking brighter this morning, given that CPI is expected to continue its rise ... while retail sales numbers are likely to show consumers tightening their belts and reining in on consumption as the cost-of-living crisis bites ever deeper,” said Cole.

Meanwhile, the domestically-focused FTSE 250 index added 0.5 per cent.

Euromoney Institutional Investor jumped 26.1 per cent after saying it received a possible cash offer which could value the information services firm at about £1.60 billion (€1.86 billion).

British recruitment firm SThree Plc rose 5.2 per cent as it said it was seeing robust demand for contract roles as employers search for the right talent in a competitive job market, after forecasting its annual profit would beat market consensus.

Europe

The pan-European Stoxx 600 index closed up 1.0 per cent, with battered banking, travel and energy stocks leading the gains, but volumes were crimped with US markets closed for a holiday.

The benchmark shed 4.6 per cent and hit over one-year lows last week in a global sell-off that was fuelled by worries about aggressive interest rate hikes by the US Federal Reserve and other major central banks sparking a recession.

European Central Bank Chief Christine Lagarde on Monday reaffirmed plans to raise interest rates twice this summer, while fighting widening spreads in the borrowing costs of different euro-zone countries.

France’s blue-chip CAC 40 rose 0.6 per cent, the least among major regional indexes, after Emmanuel Macron’s centrist Ensemble coalition secured the most seats in the National Assembly over the weekend but fell well short of securing an absolute majority needed to control parliament.

“It will mean that there will probably be less structural reforms but we’re already underweight Europe and it does not significantly change our stance,” said Willem Sels, global chief investment officer of private banking and wealth management at HSBC.

Europe’s construction and materials index dropped 1.8 per cent after Irish building insulation specialist Kingspan said the mood in most end markets had deteriorated, resulting in a dip in orders over the last two months. Danish peer Rockwool and France’s Saint-Gobain fell about 4 per cent each.

French carmaker Renault jumped 9.7 per cent after Jefferies upgraded the stock to ‘buy’.

Valneva surged 29.3 per cent after US healthcare giant Pfizer agreed to invest €90.5 million for an 8.1 per cent stake in the French vaccine company. – Additional reporting: Reuters