European shares rise as US data eases concerns about recession

European shares advanced on Wednesday after strong US economic data released the previous day eased concerns that the world’s largest economy was heading towards recession.

However, appetite for equities was tempered when European Central Bank (ECB) president Christine Lagarde reminded investors that the central bank was still not seeing enough evidence of an inflation cool-down.

The pan-European STOXX 600 index closed 0.7 per cent higher, tracking overnight gains in Wall Street.

Dublin

The Iseq All Shares index gained 1.12 per cent to 8,593.19 points, with market heavyweight CRH, which generates most of its earnings on the other side of the Atlantic, pushing 2.2 per cent higher to €49.97 as investors digested US data from Tuesday showing an unexpected jump in new orders for US-made durable goods, as well as robust readings on new home sales and consumer confidence.

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Banking stocks were out of sorts as the market digested the Government’s placing of a 5 per cent stake in AIB to reduce its holding to 46.9 per cent. AIB dipped 2.4 per cent to €3.73, while Bank of Ireland moved 0.6 per cent lower to €8.51 and Permanent TSB declined by 1.4 per cent.

Travel-related shares were in vogue, however, with Dalata Hotel Group advancing 3.7 per cent, while Irish Ferries-owner Irish Continental Group rose 2.2 per cent and Ryanair gained 1.9 per cent.

London

The blue-chip FTSE 100 rose 0.5 per cent, with software group Sage jumping 5.1 per cent to the top of the index following a broker upgrade from JP Morgan.

Markets weighed hawkish remarks from Bank of England governor Andrew Bailey, as he said last week’s rise in interest rates reflected a resilient economy and unexpectedly persistent inflation.

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“We’re getting to a situation where inflation is close to getting ingrained and becoming a big issue for the country,” said Daniela Hathorn, senior market analyst at Capital.com.

Among other stocks, Revolution Beauty jumped 29 pe cent as the London exchange lifted a suspension on trading the company’s stock after the beauty products retailer reappointed chief executive Bob Holt to the board.

Vodafone added 1.4 per cent after traders said that Exane upgraded the telecommunications company’s rating to neutral.

Ocado was a laggard, down 5 per cent on a media report that Amazon had denied speculation it would make a bid for the UK online supermarket.

Europe

Shares of chip equipment maker ASML Holding rose 2.3 per cent in Amsterdam while Nordic Semiconductor jumped 6.4 per cent, making technology among the top European sectoral gainers.

Semiconductor shares were in focus after a report stated the US was considering new restrictions on exports of artificial intelligence chips to China.

French supermarket chain Carrefour gained 3 per cent after Morgan Stanley initiated coverage with an overweight rating, which is the equivalent of a buy recommendation.

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UBS is weighing cutting tens of thousands of jobs following its emergency takeover of Credit Suisse, according to reports. Shares of the Swiss bank climbed 1.1 per cent.

German business software maker SAP added 2.2 per cent after the chief executive told business daily Handelsblatt he sees huge growth potential in generative AI technology.

New York

Over on Wall Street, the S&P 500 and Nasdaq were ahead in early afternoon trading as gains in tech giants Apple and Microsoft offset worries over the Federal Reserve’s aggressive interest rate hikes slowing the US economy.

Apple rose to an all-time high, while Amazon, Alphabet and Tesla also gained.

“The market is very focused on the only real source of growth which is the technology sector and specifically the AI sector, which has raised the valuation of that vector significantly versus the rest of the market,” said Michael Green, portfolio manager at Simplify Asset Management.

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Chipmaker Nvidia was down slightly, having recovered from sharp losses earlier in the session after the Wall Street Journal reported the United States could impose new curbs on exports of artificial intelligence chips to China.

Bank stocks slipped in advance of the Fed’s annual stress test results, which will help determine how much capital banks need to be healthy and how much they can return to shareholders via stock buy-backs and dividends.

– Additional reporting, Reuters