Business

European shares reach new high as investors cheer robust earnings

FTSE 100 closes at all-time high as housebuilder stocks are lifted by hopes of rate cut

Traders at the New York Stock Exchange. On Wall Street, the benchmark S&P 500 and the Nasdaq touched record highs after a lower-than-expected increase in a key inflation metric buttressed hopes that the Federal Reserve will cut interest rates this year. Photograph: Spencer Platt/Getty Images

Laura Slattery
Wed May 15 2024 - 18:24

Europe’s main share index notched up a record high on Wednesday as investors cheered robust earnings from companies including the UK’s Experian and Germany’s Commerzbank, while rate-sensitive stocks got a boost after softer-than-expected US inflation data.

Britain’s FTSE 100, meanwhile, closed at an all-time high, lifted in part by housebuilder stocks buoyed by hopes of an interest rate cut.

Dublin

The Iseq index nudged up 0.2 per cent in line with the modestly positive trend across Europe, with Smurfit Kappa and Kingspan the main risers.

Smurfit Kappa advanced 1.7 per cent to €44.29, with the packaging group gaining momentum throughout the day, while insulation-maker Kingspan added to Tuesday’s gain with a 1.5 per cent climb in Wednesday’s session, finishing at €90.50.

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But Ryanair slipped 0.2 per cent to €18.74 and food group Kerry was also under pressure, closing down 1.5 per cent at €78.25.

There was mixed fortunes for banking stocks, with AIB rising 0.5 per cent to €5.01, but Bank of Ireland finishing 0.4 per cent lower at €10.13.

London

The FTSE 100 edged up 0.2 per cent to an all-time high, lifted in part by housebuilder stocks buoyed by hopes of an interest rate cut, while Burberry’s shares sank after it reported a sharp fall in quarterly sales.

Burberry slid 7.3 per cent after the luxury group’s fourth-quarter like-for-like sales slumped 12 per cent and annual profits dropped by 34 per cent amid a wider slowdown in the sector.

Compass Group dropped 3 per cent as the catering group expects volumes to moderate for the rest of the year.

Credit data firm Experian advanced 8.1 per cent after it forecast annual organic revenue growth of between 6 per cent and 8 per cent for fiscal year 2025.

The FTSE 250 midcap index climbed 0.8 per cent to its highest level in more than two years.

Royal Mail’s parent company International Distributions Services surged 16 per cent after it said it was set to agree a takeover by Daniel Kretinsky if the Czech billionaire makes a formal offer.

Europe

The pan-European STOXX 600 was up 0.6 per cent, with Germany’s DAX and France’s CAC 40 index also closing at all-time highs. A gauge of investors’ fears dropped to the lowest point for more than a month.

Rate-sensitive real estate and technology stocks jumped 3.6 per cent and 1.1 per cent respectively after data showed US consumer prices rose less-than-expected in April, boosting bets the Federal Reserve will cut interest rates two times this year, making room for larger cuts from the European Central Bank.

Boosting the healthcare index, Germany’s Merck rose 4.7 per cent after better-than-expected adjusted earnings, helped by strong demand for its pharmaceuticals.

Commerzbank climbed 5.1 per cent and was among top gainers on Germany’s main index after the lender reported its strongest quarterly profit in a decade, beating expectations.

However, Finland’s Neste slumped 14.8 per cent after the biofuels producer and oil refiner lowered its 2024 margin outlook for renewable products, while Dutch bank ABN Amro shed 6.1 per cent after a weaker first-quarter capital ratio overshadowed a better-than-forecast net profit.

Carrefour shed 4 per cent after analysts at JP Morgan downgraded the French supermarket to “underweight” from “neutral”.

US

On Wall Street the benchmark S&P 500 and the Nasdaq touched record highs after a lower-than-expected increase in a key inflation metric buttressed hopes that the Federal Reserve will cut interest rates this year.

The blue-chip Dow was set to breach the 40,000 mark for the first time, while the two other major indexes surpassed all-time peaks hit in March as tepid consumer prices data for April led traders to raise bets that the Fed will cut its policy rate in September and again in December.

Most mega-cap growth and technology stocks climbed, with Nvidia leading the gains.

Additional reporting: Reuters

Laura Slattery

Laura Slattery

Laura Slattery is an Irish Times journalist writing about media, advertising and other business topics

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