Business

European shares approached record highs as Irish index dipped

Irish stocks were dragged lower by falling bank shares in both AIB and Bank of Ireland

FedEx – an economic barometer – surged on solid earnings and a $5 billion buyback plan in New York. Photograph: Bloomberg

Ciara O'Brien
Fri Mar 22 2024 - 19:12

European shares paused near record highs on Friday with British, German and Italian stocks outperforming regional peers following a slate of dovish cues from major central banks this week.

Dublin

The Irish index of shares ended the week lower, bucking the wider European trend to close at 0.35 per cent off. It was dragged lower by falling bank shares with AIB and Bank of Ireland losing 2.2 per cent and 1.3 per cent respectively.

Cairn Homes also declined 2.2 per cent, while ferries group Irish Continental was down 1 per cent by the closing bell. Ryanair, Smurfit Kappa and Glanbia also ended the day slightly off the pace.

On the other end of the scale, exploration group Kenmare Resources rose 12 per cent, and shares in Uniphar rose by almost 2.3 per cent to €2.68.

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London

UK’s FTSE 100 closed at its highest level in a year on Friday as investors continued to cheer the dovish tilt in the Bank of England’s monetary policy, while insurer Phoenix Group notched its best day in four years after issuing an upbeat forecast.

The blue-chip FTSE 100 rose 0.6 per cent to clinch its second straight week of gains, powered by a near 2 per cent rise on Thursday after the BoE said the economy was moving in the direction for interest rate cuts.

At top of the index was Phoenix Group, adding 8.4 per cent after the insurer said it expected to increase profits by nearly a half and generate higher operating cash by 2026.

Among others, JD Wetherspoon said sales growth had slowed at the start of its fiscal second half and that margins were still below pre-pandemic levels, sending its shares down 6.3 per cent.

Legal & General climbed 1.4 per cent after Reuters reported that the insurer and asset manager shelved a plan to obtain a China business licence and more than halved onshore headcount.

JD Sports fell 6.3 per cent after its US counterpart Nike warned that its revenue in the first half of fiscal 2025 would shrink by a low single-digit percentage.

Europe

The pan-European STOXX 600 index ended flat but notched its ninth straight weekly gain after logging another intraday all-time high earlier in the day.

German stocks rose 0.2 per cent after a survey showed the country’s business morale improved in March more than expected. Italy’s IBEX 35 firmed 0.7 per cent as Santander, the euro zone’s second-biggest bank by market value, said it was on track to pay shareholders more than €6 billion in dividends and buy-backs in 2024. Santander shares gained about 2 per cent.

Adding to the upbeat mood, European Central Bank head Christine Lagarde told European Union leaders gathered in Brussels the eurozone’s inflation rate was set to keep on falling, while economic growth would start picking up this year.

UK’s Phoenix Group topped the benchmark European index with a roughly 8 per cent jump after the insurer said it expected to turn a profit of £900 million and generate higher operating cash by 2026.

Spain’s Grifols fell 6 per cent as market supervisor CNMV found no significant errors in the drugmaker’s accounts but “deficiencies in the detail and accuracy of breakdowns and explanatory notes in some years”.

New York

The rally in stocks took a breather, with the market still heading toward its best week in 2024 amid speculation the Federal Reserve will be able to cut interest rates as soon as June. Equities drifted after an advance that saw the S&P 500 climb more than 2 per cent since last Friday. Tesla led losses in megacaps, while Nike and Lululemon Athletica fell on weak outlooks. FedEx – an economic barometer – surged on solid earnings and a $5 billion buyback plan.

The S&P 500 hovered near 5,235, with volume 20 per cent below the past-month average. – Additional reporting; Reuters

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist

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