European markets climb after rollercoaster session

European markets closed higher after a rollercoaster session, with stocks rebounding from a near two-year low touched earlier in the day after a higher than expected US inflation figure for September spurred bets of an aggressive interest rate increase from the US Federal Reserve.

The gains meant European stocks snapped a six-day losing streak.

Dublin

The Iseq index climbed 1.9 per cent, recovering lost ground late in the volatile session. It was a strong day for Ryanair, which rose 3.2 per cent to €10.61 on a day of positive sentiment towards airlines after EasyJet indicated travel demand was holding up this winter and next summer, and Aer Lingus owner International Consolidated Airlines Group (IAG) also issued a bullish trading update.

Bank of Ireland rose 4.95 per cent to €7.50 and AIB added 5 per cent to €2.92 as European bank stocks advanced. Index heavyweight CRH was also among the stocks to rise, with the building materials group adding 1.7 per cent to €33.26, while Flutter Entertainment rose 3.5 per cent to €118.45.

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On a weaker day for food stocks, Glanbia edged down 0.7 per cent to €11.80 and Kerry lost 2.7 per cent to close the session at €86.98.

London

The blue-chip FTSE 100 index rose 0.4 per cent in the topsy-turvy trading session, while the mid-cap FTSE 250 added 1.9 per cent, as investor sentiment was boosted by reports that the UK government is preparing to abandon its tax-cutting fiscal plan.

Rate-sensitive banks and insurers, which have been clobbered in the last few sessions by the turmoil in bond markets, added 3.8 per cent and 4.7 per cent respectively.

Weighing on the FTSE 100 index, defensive consumer staples stocks such as Unilever and Diageo fell more than 2 per cent each.

EasyJet climbed 2.7 per cent after saying bookings for the coming months were progressing well, while IAG surged almost 8 per cent after reporting better-than-expected results for the summer. The Aer Lingus and British Airways owner said it was now forecasting pre-exceptional operating profit for the third quarter of about €1.2 billion, a figure above market expectations.

Europe

The pan-European Stoxx 600 index rose 0.85 per cent, having fallen a cumulative 4.3 per cent in the previous six sessions as investors worried about recent warnings from the International Monetary Fund and the World Bank about a recession. In Frankfurt, the Dax climbed 1.5 per cent, while in Paris, the Cac 40 finished 1 per cent higher.

Among Stoxx sectors, financials were the biggest boost to the index, while tech stocks came off their lowest point since May 2020, hit earlier in the session, and were up 0.3 per cent. Gains in energy and industrials also boosted the index.

Chipmakers including Infineon and ASML reversed session losses to gain between 0.9 per cent and 3 per cent. Norwegian aluminium producer Norsk Hydro jumped 6.7 per cent after reports that the US was weighing restricting imports of Russian aluminium.

New York

Stocks reversed course to rally sharply higher and the dollar gave up strong gains as investors digested a red hot US inflation reading that cemented bets for a big Federal Reserve rate hike next month.

Traders initially flipped to safety mode after the US Labor Department’s consumer prices index (CPI) report showed headline CPI gaining at 8.2 per cent annually as rents surged by the most since 1990 and the cost of food also rose.

On Wall Street, the S&P 500 fell as much as 2.3 per cent in the first hours of trading while Nasdaq dropped as much as 3.2 per cent before both recovered their losses to soar higher.

Walgreens Boots Alliance surged 4.2 per cent after it reported a better-than-expected quarterly profit. Delta Air Lines gained 3.9 per cent after the carrier highlighted robust domestic and international demand.

Additional reporting: Reuters