Shares tread water despite hawkish central bank comments

European shares inched higher on Thursday despite hawkish commentary from central banks that has dashed hopes for a pivot toward lower rates any time soon.

A global bond rout deepened on Thursday amid speculation that the US and Europe are poised to keep interest rates elevated despite a pause in the oil price rally that had spooked investors earlier in the week.

Dublin

The Iseq All Share index underperformed its peers in what traders described as an uneventful session in Dublin, shedding 0.1 per cent.

Kerry Group, one of the biggest movers on Thursday, fell 3.4 per cent to close the session at €77.02. The food ingredients giant followed other sectoral names like Glanbia and Greencore lower, with the two companies shedding 0.8 per cent and 1.1 per cent respectively.

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Paddy Power-owner Flutter had another poor session, giving back 0.35 per cent to close at €156.95 per share. The downward move for the betting group followed an update from rival 888, which lowered its annual core profit expectations after a 10 per cent decline in third-quarter revenue, partly due to tighter regulations in Britain.

The Irish banks were a mixed bag with Bank of Ireland, up 2.4 per cent to €9.32, outperforming the pack. Shares in AIB stood at €4.20 on Thursday evening, down 0.2 per cent on the session, while Permanent TSB was off by almost 2.4 per cent at €2.04.

Meanwhile, building product names including Kingspan and Woodies-owner Grafton Group were stronger on the day, while CRH, which gave up its Dublin listing last week, added 2.9 per cent in New York.

Europe

European shares advanced marginally with the pan-European Stoxx 600 index ahead by 0.4 per cent on Thursday and the benchmark Stoxx 50 advancing by close to 0.8 per cent.

Spanish banks BBVA and Santander extended recent gains, adding 4.5 per cent and 3.3 per cent, after European Central Bank president Christine Lagarde reiterated her stance that interest rates will have to remain higher for longer. Other names in European banking, including Dutch lender ING and France’s BNP Paribas, also advanced.

The German Dax index, meanwhile, moved 0.7 per cent higher after data showed inflation in Europe’s economy plunged to its lowest level in two years this month.

Shares in electronics giant Siemens and automaker Mercedes Benz gained 1 per cent and 0.9 per cent following the data release, while chemical maker BASF added 0.9 per cent.

London

London’s benchmark FTSE 100 index edged slightly more than 0.1 per cent higher but struggled compared with its European peers as housebuilders were dragged by gilt yields.

The yield on gilts – UK government bonds – rose amid concerns that interest rates could remain high for a long period, while analysts also suggested high oil prices could be partly to blame.

Gambling firm 888 slid after it warned over earnings and revenues due to an impact from sporting results that benefited customers and new gambling rules. The group, which runs William Hill’s European business, said it expects revenue for the third quarter of the year to dip around 10 per cent to somewhere close to £400 million.

Meanwhile, Diageo shares floated marginally higher after the Guinness-maker stuck by the company’s guidance for the year despite persistent cost pressures. The firm, which also makes Gordons gin and Pimms, saw shares increase by 16p to 3,038p after bosses said the company was resilient and can navigate the headwinds caused by the UK economy.

New York

By closing bell in Dublin, both the Dow Jones Industrial Average and the S&P 500 indices were essentially flat on the session, lagged by the Nasdaq Composite, which fell 0.4 per cent.

Treasury yields resumed their upward charge while investors assessed fresh economic data showing that consumer spending advanced at half the pace previously reported in the second quarter, largely due to weaker services outlays.

Among individual movers, Micron Technology dropped 4.7 per cent after forecasting a bigger-than-expected first-quarter loss.

CarMax lost 11.2 per cent after the used-car retailer posted a lower-than-expected quarterly profit.

Accenture slumped 4.4 per cent after the IT services firm forecast full-year earnings and first-quarter revenue below Wall Street targets.

– Additional reporting: Reuters, Bloomberg