European shares advance on solid earnings and as investors digest ECB increase

European shares rose on Friday on the back of solid earnings from the likes of Adidas and Apple and as investors took heart from the European Central Bank (ECB) scaling back its pace of rate hikes this week.

The pan-European Stoxx 600 index advanced 1.1 per cent, with the oil and gas sector index leading gains, rising 2.7 per cent after crude prices firmed.

Dublin

The Iseq All Share index ended the session up 1.3 per cent at 8,396.67. Banking stocks counted among the main winners as the market digested solid trading updates from the State’s three remaining banks this week, with net interest income tracking higher on the back of rising ECB rates and non-performing loans declining even as households and businesses grappled with rising prices.

AIB gained 1.2 per cent to €3.93, while Bank of Ireland moved up 2.8 per cent to €8.91. Permanent TSB advanced 1.3 per cent to €2.36.

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CRH was also in demand, pushing 1.6 per cent higher to €44.73.

Ryanair soared 2.2 per cent to €14.89, after International Airlines Group, parent of Aer Lingus, raised its profit guidance.

London

The FTSE 100 ended 1 per cent higher, a day after hitting a one-month low.

Among major movers, HSBC gained 2.7 per cent after soundly defeating a bid to break up the bank and potentially spin out its lucrative Asian business at its annual investor meeting.

Markets in London will be closed on Monday on account of a bank holiday following the official coronation of Britain’s King Charles over the weekend.

IAG rose 2.3 per cent after lifting its 2023 profit forecasts on strong travel demand.

IHG lost 1.9 per cent after the Holiday Inn owner said its chief executive, Keith Barr, would step down.

Europe

An ECB survey showed euro zone inflation could be lower in the coming years than previously expected but may stay above the ECB’s 2 per cent target further out.

Shares in German chemical companies jumped after the government announced energy subsidies to help the country’s industrial sector.

BASF, Covestro, Wacker Chemie and Lanxess jumped between 2.2 per cent and 9 per cent.

Air France-KLM lost 2.6 per cent after reporting a steeper than expected quarterly operating loss.

[ US bank PacWest explores potential sale after shares plummet 50% ]

German sportswear giant Adidas jumped 8.9 per cent after reporting better-than-expected first-quarter results.

For the week, media stocks were the biggest decliners, falling 5.8 per cent in the worst performance in over three years. Defensive food & beverages rose 1.2 per cent, leading gains for the week.

New York

Wall Street’s main indexes were higher in early afternoon trading as upbeat results from Apple underscored resilience in corporate earnings, while a stronger-than-expected jobs report eased fears of an imminent economic downturn.

Apple’s better-than-expected results were helped by strong iPhone sales and notable inroads in India and other newer markets.

Investors appeared to take in stride data showing US employers boosted hiring in April while raising wages, pointing to sustained labour market strength that could prompt the Federal Reserve to keep interest rates higher for some time.

The Labor department’s report showed non-farm payrolls increased by 253,000 last month, higher than economists’ expectations of 180,000.

While Wall Street fell on Thursday after regional US lender PacWest Bancorp’s move to explore strategic options deepened concerns about the health of regional banks, the bank rebounded on Friday. Rival also rallied as it denied a report that it was exploring a potential sale.

Used-car retailer Carvana moved ahead as it expects to post a profit in the current quarter and plans to further bring down excess used-car inventory.

Lyft slumped as the ride-hailing company’s strategy to claw back market share from rival Uber Technologies Inc with lower fares stoked concerns about a hit to its profit margins. – Additional reporting, Reuters