European stocks gain on hopes of measured Fed rate hikes

European shares rose on Friday as hopes the US Federal Reserve could adopt a measured approach to rate hikes lifted the technology sector, while miners extended their rally on growing bets for a demand recovery in China.

Overnight, Atlanta Fed president Raphael Bostic said he favoured “slow and steady” rate hikes with a pause by mid or late summer.

Dublin

On the Irish market, the Iseq rose just over half a per cent to close the week at 8,447. The index was supported by gains in packaging giant Smurfit Kappa, which saw shares increase 1.1 per cent to €36.42, and AIB, which added just over 1 per cent to end the week at €4.01.

But banking shares were mixed, with Bank of Ireland shedding half a per cent to finish at €10.28 and Permanent TSB ending the day flat.

Travel stocks showed some growth. Ryanair saw its shares gain almost 2.1 per cent over the session, ending at €15.40. Hotel group Dalata also had a good day, gaining 3 per cent to €4.275.

CRH was largely flat, closing at €48.04, but that came after the largest company on the Iseq revealed on Thursday it plans to move its primary stock listing to the US and accelerate its share buyback programme. The news sent its stock soaring, adding €3.89 billion to its market value.

London

The UK’s FTSE 100 lost its initial momentum on Friday, dragged down by energy majors Shell and BP, while investors also assessed the likelihood for more Bank of England (BoE) monetary policy tightening following strong business activity figures in February.

The blue-chip FTSE 100 closed flat, while the more domestically focused FTSE 250 midcap index added 0.4 per cent.

Both the indexes logged weekly gains, boosted by optimism around a likely end to the BoE’s rate-hiking cycle and larger-than-expected expansion in top metals consumer China’s manufacturing activity.

With Shell and BP losing around 1 per cent each, oil and gas was among the worst-performing sector indexes on Friday.

Meanwhile, gains in miners such as Glencore and Rio Tinto kept the FTSE 100 afloat, tracking higher metal prices on hopes of a demand recovery in China.

Among individual stocks, Pearson slid 3.8 per cent to the bottom of the FTSE 100 after the education group did not announce a further share buyback despite offering a positive outlook.

Rightmove fell 1.1 per cent after the British property portal reported lower engagement seen on its site during 2022, while oilfield services firm Hunting lost 7.7 per cent after Berenberg downgraded the stock to “hold” from “buy”.

Europe

European shares climbed on Friday, buoyed by positive data on the recovery in euro-zone business activity, the latest piece of data to suggest the bloc would avoid a recession.

Mining stocks rose 2.2 per cent with prospects of China’s reopening shoring up demand one theme that played out for much of the week after the country’s data pointed to improving economic conditions.

Leading regional equity gains on Friday, Germany’s Dax added 1.6 per cent as Europe’s top carmaker Volkswagen jumped 10.6 per cent to the top of the index on a surprisingly strong 2023 sales outlook as it expects supply-chain issues to ease.

Sweden-based Volvo Car added 5.8 per cent after sales grew in February. Lufthansa was up 5.1 per cent after the German airline swung to a “clearly positive result” in 2022.

New York

Wall Street stocks posted strong gains while Treasury yields and the dollar pulled back on Friday as data pointing to economic growth boosted risk appetite, even as expectations for rate hikes kept bond yields near multiyear highs.

Apple jumped 2.9 per cent after Morgan Stanley said the stock could rally more than 20 per cent this year on a potential hardware subscription.

Broadcom advanced 5.5 per cent after the chipmaker forecast second-quarter revenue above analysts’ estimates as increased investments in AI spurred demand for chips.

Among losers, Costco Wholesale Corp slipped 2.8 per cent on the heels of its revenue miss, as high inflation dampened consumer demand.

Chipmaker Marvell Technology Inc slid 6.3 per cent in the wake of the company’s quarterly profit miss and disappointing revenue forecast. – Additional reporting: Reuters, Bloomberg

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