European shares rise on China economic stimulus hopes

European shares ended higher on Wednesday, supported by commodity-linked stocks which rose on hopes of more stimulus in major importer China, while easing bond yields took pressure off the technology sector.

The pan-European Stoxx 600 index closed up 0.7 per cent, with the basic resources and energy sectors up 3.2 per cent and 2.3 per cent, respectively.

Commodity prices rose after sluggish factory-gate inflation data in China showed more room for policy easing, which is likely to see the central bank release more money into the economy.

Dublin

The Iseq overall index advanced 0.6 per cent to 8,604.89. Cairn Homes soared 7.2 per cent to €1.25 after the housebuilder pledged to return €95 million to investors this year after earning €58 million operating profit in 2021 on its strongest ever performance.

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Market heavyweight CRH moved 0.8 per cent higher to €47.03, while Kingspan jumped 2.6 per cent to €98.76, with both aided by favourable comment from analysts at Bank of America.

Banking stocks were also in demand, with Bank of Ireland up 4.6 per cent at €5.80, while AIB gained 2.1 per cent to €2.54.

London

London’s FTSE 100 gained 0.8 per cent, led by mining and oil giants following a global rally in risk assets, while a slew of positive earnings updates including a forecast lift from supermarket group Sainsbury’s also aided the mood.

Heavyweight metal miners BHP Group, Glencore, Antofagasta and Anglo American jumped about 3 per cent on the hopes of more economic support in China, the world's top metal consumer.

Sainsbury's gained 3.1 per cent after it raised its full-year profit forecast by at least 9 per cent following stronger-than-expected food sales over Christmas, even though it fell short of its stellar 2020 festive performance.

Of Irish interest, Dublin-based but London-listed Grafton Group advanced 2.5 per cent after the builders' merchants and DIY retailer group raised its 2021 earnings forecast again.

Among other earnings updates, recruiter PageGroup lifted its full-year profit forecast for the third time in six months, buoyed by a surge in demand for long-term hiring and staff shortages. Its shares ended 0.6 per cent down, however.

JD Sports Fashion fell 3.3 per cent to give back early gains even as it raised its annual profit forecast ahead of market expectations.

Europe

German software company TeamViewer surged 14.9 per cent after announcing upbeat preliminary fourth-quarter and full-year results.

French cloud computing company OVHcloud climbed 4.6 per cent following a 13.9 per cent rise in first-quarter revenue and said it was on track to achieve its full-year targets.

Just Eat Takeaway. com, Europe's largest meal delivery company, inched 3.6 per cent higher after posting a 14 per cent increase in orders in the fourth quarter and maintained its financial forecasts for 2022.

Dutch firm Philips plunged 15.5 per cent after saying it expects fourth-quarter core profit to drop by about 40 per cent, hit by a global shortage of parts and a recall of ventilators.

New York

US stock indexes rose were ahead in mid-afternoon trading on Wall Street after inflation data largely met high expectations, easing some fears that the Federal Reserve would pull back support, with megacap technology stocks offering the biggest boost.

In the 12 months through December, the CPI surged 7 per cent to its highest year-on-year rise in nearly four decades.

JPMorgan Chase, Citigroup and Morgan Stanley will report their results on Friday, followed by Bank of America Corp on January19th.

The healthcare index, the S&P's biggest percentage decliner, was weighed down by shares of drugmaker Eli Lilly and Biogen.

The US government Medicare programme said that while it plans to cover Biogen's Aduhelm Alzheimer's treatment it will require patients to be enrolled in a clinical trial, limiting access to the medication. This could also impact Eli Lilly, which is developing similar drugs. – Additional reporting: Reuters