Interest rate hikes boost global shares

Shares rose across Europe on Thursday, aided by central bankers hiking borrowing charges in line with market expectations.

DUBLIN

Irish bank shares fell despite news that borrowing charges are on the rise again. AIB closed 3.51 per cent down at €3.74 while its peer Bank of Ireland was 4.75 per cent off at €9.47.

Ryanair Holdings gained further altitude, climbing 3.74 per cent to €15.515. The airline reported that January passenger numbers jumped 69 per cent to 11.8 million, while it sold 91 per cent of the seats on its planes. The company reported third-quarter profits of €211 million earlier this week.

Packaging giant Smurfit Kappa, another of the Iseq’s heavyweights, closed 1.41 per cent ahead at €39.64.

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Building materials group CRH rose 2.29 per cent to close at €44.20. Insulation maker Kingspan climbed 7.1 per cent to €64.24.

LONDON

News that the Bank of England expects Britain to fall into a shorter, shallower recession than previously anticipated boosted shares in London.

The FTSE 250 lurched by 3.6 per cent on Thursday, as the slightly more upbeat outlook on the UK economy prompted investors to pour cash into the more domestically-focused index.

Shares in oil major Shell fell 1.2 per cent to 2,337.5 pence sterling even as the Anglo-Dutch giant reported that it earned a record £68 billion (€84.3 billion) last year, adding that it had paid £1.7 billion in windfall taxes to governments.

News that the oil company was raking in cash while families struggled to heat their homes prompted political anger, making investors wary of the stock. Britain’s Labour Party told the governing Tories that they were letting Shell away with bumper profits.

BT’s shares showed a surprise 6.86 per cent jump to 132.40p, despite the company missing revenue consensus in the third quarter of the financial year.

The telecoms company said that the consumer-facing business was up against “tough” market conditions as turnover fell 3 per cent in the three months to the end of December.

EUROPE

The pan-European Stoxx 600 rose sharply following the European Central Bank’s announcement that it would increase its interest rate by half a percentage point, bringing it to 2.5 per cent.

The Stoxx 600, which tracks leading shares across 18 markets, closed 1.35 per cent ahead, bringing the benchmark to its highest level in almost two years.

Shares in Italian auto maker Ferrari accelerated 7.3 per cent to close at €246.80, after the company reported strong results. Earnings hit €1.77 billion last year, while Ferrari said they reached €469 million in the fourth quarter alone, beating most estimates by around 5 per cent.

The company predicted that earnings this year would fall between €2.13 and €2.18 billion.

On the same market, Telecom Italia closed 9.5 per cent ahead at 29 cent at the news that US private equity player KKR & Co was planning a non-binding offer for the company’s fixed-line network. Shares in the telco shot up as much as 11 per cent in early trade, before slipping back slightly.

Washing machine maker Electrolux slid 9 per cent to 133.7 Swedish kroner, after warning that sales would ease this year while it faced higher labour and energy costs.

US

On Wall Street, the S&P 500 and Nasdaq rallied, with the S&P 500 touching its highest intraday level since August 26th and the Nasdaq hitting its highest since September 12th, getting an additional boost from a 27.06 per cent surge in Facebook parent Meta Platforms, following its quarterly results and $40 billion buyback announcement.

Tech heavyweights Apple and Amazon were due to report earnings after the closing bell in New York on Thursday. Refinitiv Data predicted that earnings for the fourth quarter would fall from the same period the previous year. – Additional reporting: Reuters, Bloomberg