Global shares rally as US inflation slows ahead of rate decision

Global shares rallied and the dollar eased on Tuesday after US inflation data showed consumer prices barely rose in May, increasing expectations the Federal Reserve will pause hiking interest rates when it concludes a two-day meeting on Wednesday.

Dublin

Euronext Dublin was up almost 1 per cent as it benefited from the promising inflation data from the United States.

Among the banks, AIB finished up 70 basis point, while Bank of Ireland was flat on the day. A trader said there was “decent volume” in shares traded in Bank of Ireland in particular.

There was some weakness in Permanent TSB, however, as it fell 4 per cent. A trader linked the fall to the recent move by the Government and NatWest moved to start a surprise sell-down of some of the shares they each hold in the group.

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Among the index’s heavy hitters, Paddy Power Betfair parent Flutter Entertainment was up 2.9 per cent at close of business, following the example of some of its US peers.

In the tourism and leisure sector, Dalata Hotel Group – the largest hotel operator in the State – was up 1.5 per cent.

There was some pressure still on landlord Ires Reit and agri-services outfit Origin Enterprises which were both down about 2 per cent at the end of trading.

Elsewhere, home builder Cairn Homes was up 3 per cent as it continued to build on its recent momentum. Finally, Kerry Group finished the day up 0.5 per cent.

London

The FTSE 100 – which is sensitive to international news – closed up 0.32 per cent, helped up by gains for mining stocks following a boost in oil prices.

In company news, shares in housebuilder Bellway dipped after the company cautioned over a slowdown in demand for private properties.

The FTSE 250-listed firm said it had seen an improvement in demand over the spring compared to a more challenging end to last year.

But bosses remain “mindful” that cost-of-living pressures and higher interest rates could continue to have an impact. Shares in Bellway fell by nearly 3 per cent.

Elsewhere, energy giant Centrica told shareholders at its annual general meeting that profits will be “significantly higher” than previous years in its household energy business over the first half of 2023.

The boost will be felt by its retail division, which includes British Gas. Nevertheless, shares in Centrica dipped by 0.2 per cent.

Europe

European stocks moved higher after the US inflation suggested the cost-of-living squeeze is abating.

The pan-regional Stoxx 600 index gained 0.59 per cent. It was a positive session for other European markets. Germany’s Dax rose 0.83 per cent and France’s Cac closed 0.56 per cent higher.

New York

The S&P 500 and Nasdaq rose to fresh one-year highs after data showed consumer prices rose modestly in May, cementing bets that the Federal Reserve could skip raising interest rates at the end of its policy meeting on Wednesday.

The consumer price index rose 0.1 per cent last month compared with a 0.4 per cent jump in April, with core inflation remaining unchanged at 0.4 per cent, according to the US labour department report.

At 9.55am eastern time, the Dow Jones Industrial Average was up 0.46 per cent; the S&P 500 was up 0.56 per cent; and the Nasdaq Composite was up 0.59 per cent.

Oracle jumped 4.3 per cent to hit a fresh all-time high on upbeat quarterly revenue and forecast, while Intel gained 1.1 per cent on talks with SoftBank Group’s arm to be an anchor investor in its initial public offering.

Bunge inched up 0.3 per cent after the US grains merchant and Glencore-backed Viterra said they were merging to create an agricultural trading giant.

US-listed shares of Chinese companies including JD.com, Alibaba Group, Baidu and Netease rose between 2.9 per cent and 4.9 per cent after China’s central bank lowered its short-term lending rate for the first time in 10 months. Additional reporting: agencies