Global shares rise amid signs inflation and rate hikes are on the way down

Global stocks rose on Tuesday as EU investors were encouraged by data showing a slowdown in inflation and indications from one central banker that interest rates will fall next year.

Dublin

The ISEQ All Share Index gained 1.33 per cent on Tuesday, to close at 8,718.48.

AIB rose marginally to €3.81 and Bank of Ireland gained 0.17 per cent to close at €8.30. Shares in Permanent TSB remained flat at €1.75.

Ireland’s two listed home-builders both gained on the day. Cairn Homes rose by 1.1 per cent to €1.29, while Glenveagh Properties gained 1.19 per cent to close at €1.19.

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Meanwhile, building materials company Kingspan was up 1.18 per cent, closing at €78.72. It received clearance to proceed with a deal in New Zealand.

It was a strong day for Paddy Power parent Flutter Entertainment as shares rose by just under 4 per cent to €160.95.

Food company Glanbia saw losses on the day, falling by 1.5 per cent to €14.98. Fellow food company Kerry was also off, down 0.45 per cent by the close, to a share value of €74.78.

Budget airline Ryanair rose by 1.79 per cent to close at €19, while packaging company Smurfit Kappa gained 0.55 per cent to €36.70.

London

The UK’s export-heavy FTSE 100 Index gained 0.31 per cent on Tuesday to close at 7,638. Meanwhile the more domestically-focused FTSE Mid-Cap 250 Index rose by 0.42 per cent to 19,315.98.

Investors in the UK will focus on inflation data due on Wednesday, which is expected to show headline inflation of 4.4 per cent year-on-year to November, against last month’s reading of 4.6 per cent.

Among individual stocks Superdry dropped 17.46 per cent after the British fashion retailer flagged a hit to annual profits as sales were “significantly below” the management’s expectations.

Shares of banknote maker De La Rue fell by 4.82 per cent despite the company keeping its annual forecast unchanged and reporting half-year profit in line with its expectations.

Europe

European shares rose in the wake of commentary from a European Central Bank official and data that confirmed cooling inflation in the euro zone. The pan-European STOXX 600 Index gained 0.43 per cent to close at 477.36. Meanwhile, the German DAX Index gained 0.58 per cent to close at 16,747.86, and the French CAC 40 Index rose by 0.08 per cent to 7,574.67.

Eurostat data confirmed that euro zone inflation slowed sharply to 2.4 per cent in November on a year-on-year basis, although many economists expect price pressures to tick up again in the coming months. European Central Bank member Francois Villeroy de Galhau said on Tuesday that interest rates should be lowered in 2024 and that inflation should be back down to the ECB’s 2 per cent target by 2025 at the latest.

Covestro gained 1.4 per cent following a report that the Abu Dhabi National Oil Co was preparing to raise its offer for the German chemicals maker.

Norwegian energy group Equinor lost 2.13 per cent after RBC downgraded the stock’s rating to “sector perform” from “outperform”.

New York

Wall Street’s main stock indexes rose, building on strong gains in recent weeks as investors continued to bet on a reversal of monetary policy by the Federal Reserve next year. A commerce department report showed single-family home-building surged in November as investors await other economic data later this week, including the final reading of third-quarter GDP and the monthly personal consumption expenditure index (PCE), the Fed’s preferred inflation gauge.

Among single stocks Accenture dipped after the IT services provider issued a downbeat second-quarter revenue forecast, anticipating cautious spending by clients as macroeconomic uncertainty remains an overhang.

Boeing gained after German airline Lufthansa said it ordered 40 737-8 MAX jets from the plane-maker and agreed to 60 future purchasing options.

Kenvue also rose after a US court ruled in favour of the consumer health company in a lawsuit which said exposure to its pain-reducing drug Tylenol might contribute to autism or attention-deficit hyperactivity disorder during pregnancy.

PepsiCo fell after JP Morgan downgraded the stock to “neutral” from “overweight”, while Amgen rose after BMO upgraded its rating on the drugmaker to “outperform” from “market perform”.

Additional reporting from Reuters.

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