Investors stay wary of Fed stance on mixed day for markets

Fears that the US Federal Reserve would continue hiking interest rates for longer than expected cooled continental investors’ sentiment on Thursday while Ryanair lifted the Irish market and airline stocks.

DUBLIN

Ryanair dominated the Dublin market after boosting its profit forecast late on Wednesday following a strong Christmas that left it with an estimated €200 million profit in its third quarter.

Shares in the Irish airline climbed as much as 7 per cent to €13.825 during the day before paring some of those gains later, ending the day 6.1 per cent ahead at €13.635.

Dealers said the shares started strong and remained that way for most of the session. Ryanair announced on Wednesday night that it expected profit for its current financial year, which ends on March 31st, to land between €1.325 billion and €1.425 billion. It originally guided €1 billion to €1.25 billion.

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The news resulted in a good day for many other airline shares around Europe, where Ryanair is the largest carrier, while it also lifted the Iseq index.

In contrast, shares in housebuilder Glenveagh Properties lost ground after the company told markets that it would complete the same number of homes this year as in 2022.

It had originally hoped to surpass last year’s total but said planning delays were hindering completions.

Glenveagh’s stock tumbled as much as 10 per cent to 81 cent at one point before rallying to end the day 5.45 per cent down at 85 cent. Elsewhere, hotelier Dalata gained 5.05 per cent to €3.535.

LONDON

UK’s FTSE 100 closed near nine-month highs on Thursday as Standard Chartered boosted banks while retailer Next topped the index following its annual profit forecast.

The blue-chip FTSE 100 climbed 0.6 per cent, extending gains to a third straight session.

Standard Chartered initially rallied to a 4½-year high after First Abu Dhabi Bank (FAB) said it had considered a bid for the lender. Shares closed 6.8 per cent higher at 705.2 pence sterling after FAB said it was no longer exploring the deal. Banks closed 3.4 per cent up overall following the news.

Among single-stock gainers, Next soared 6.9 per cent to 6,518p after raising its pretax profit forecast for the current year as spending rose more than expected over the holiday season, shrugging off a cost-of-living crisis. Retailers closed at more than a four-month high.

Pearson dropped to the bottom of the FTSE 100 after Bank of America Global Research downgraded the education group to “underperform” from “neutral”. Its shares slumped 5.87 per cent to 898.4p.

Meanwhile, EasyJet climbed 5.89 per cent to 375.6p after investors warmed to airlines on the back of Ryanair’s profit guidance upgrade.

EUROPE

The pan-European Stoxx index was flat after gaining more than 3 per cent in its first three sessions of 2023.

Germany’s Dax declined 0.39 per cent by the end of the session and the French Cac finished 0.21 per cent lower.

Indications that the US Federal Reserve was unlikely to ease its tough monetary stance cooled European investors’ sentiment on Thursday.

Air France KLM added 2.9 per cent to end the day at €1.37 on a good day for airlines. German group Lufthansa rose 1.73 per cent to €8.34.

US

Wall Street’s main indexes fell sharply on Thursday as fresh evidence of a tight labour market and hawkish comments from policymakers deepened fears of elevated interest rates for longer than expected.

The ADP National Employment report showed a higher-than-expected rise in private employment in December, while another report showed weekly jobless claims fell last week.

Most big technology and growth stocks such as Alphabet and Microsoft fell between 1 per cent and 2.3 per cent as US Treasury yields surged on prolonged rate-hike expectations. – Additional reporting: Bloomberg, Reuters