European stocks rally on hope ECB may be done with interest rate hikes

There was a rally “across the board” of European markets on Tuesday, driven largely by news from central bankers that may indicate an end is in sight for tightening monetary policy and interest rate hikes.

Dublin

The Iseq All Share index rose by 0.41 per cent on Tuesday to 8,465.53, although still trailed slightly behind gains seen by some European peers.

Among the banks, AIB rose by 0.23 per cent to €4.34, while Bank of Ireland fell by 1.21 per cent to €8.65 and Permanent TSB dropped by 3.15 per cent to €1.69.

It was a strong day for home builder Glenveagh Properties, which gained 2.23 per cent to €1.10, while peer Cairn Homes also rose, by 0.95 per cent to €1.27. Building materials company Kingspan added 0.50 per cent, to close at €71.70.

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Food company Kerry Group also performed well on the day, rising by 1.37 per cent to €75.26, while Glanbia rose by 0.64 per cent to close at €15.23.

Paddy Power parent company Flutter Entertainment rose by 1.21 per cent to €146.05, while budget airline Ryanair rose by 0.42 per cent to close at €18.11.

Packaging giant Smurfit Kappa slipped 1.45 per cent to €34.78 while insurance company FBD Holdings also fell, losing 1.78 per cent to close at €11.05.

London

The export-heavy FTSE 100 Index fell by 0.31 per cent on Tuesday to close at 7,489.84, while the FTSE Mid-Cap 250 Index rose by 0.69 per cent to close at 18,487.53.

London’s market suffered its third outage in a few months on Tuesday and the London Stock Exchange Group said it is investigating the latest outage, which halted trading for about 2,000 smaller shares.

Trading for affected stocks was interrupted twice during morning trading according to the exchange’s website, with both episodes lasting about an hour.

Among individual stocks, Barclays fell by 2.46 per cent after one of the British bank’s largest shareholders Qatar Holding, moved to sell around £510 million (€595 million) of its stock.

Ashtead Group fell by 3.76 per cent to the bottom of the FTSE 100 Index, despite the rental equipment provider reported its second-quarter results which showed an increase of 16 per cent in group revenue.

Europe

The pan-European Stoxx 600 Index rose by 0.38 per cent on Tuesday, while the German Dax rose by 0.78 per cent and the French Cac 40 gained 0.74 per cent.

Investor sentiments were boosted by indications from the European Central Bank (ECB) that it could be finished with hiking interest rates.

ECB executive board member Isabel Schnabel said on Tuesday that the consumer price data released last week now makes another hike in borrowing costs “rather unlikely.”

German financial services company Allianz gained 1.55 per cent, while German commercial vehicle manufacturer Daimler Truck Holding added 3.70 per cent.

Ericsson jumped 6.08 per cent after AT&T chose the Swedish telecoms equipment maker over Finnish rival Nokia to build a telecom network, sending the latter’s shares down 5.94 per cent to near the bottom of the Stoxx 600.

Pirelli gained 4.92 per cent after UBS upgraded the Italian tyre maker to “buy” from “neutral”.

New York

Trading was down across New York’s three main indices on Tuesday, although softening economic data heightened expectations among traders that the US central bank may end its interest rate hiking cycle.

Figures on the US labour market showed that job openings dropped in October to the lowest level since early 2021, indicating that the labour market was easing as higher interest rates cool demand in the economy.

Among individual stocks, Take-Two Interactive Software fell after a trailer of the latest instalment of its best-selling “Grand Theft Auto” video game franchise was released. With the title planned for 2025, analysts were disappointed by the lack of an exact release date.

CVS Health rose as the insurer forecast 2024 revenue above Wall Street estimates, expecting to benefit from its expansion into health services.

Robinhood gained after the online brokerage said November crypto notional trading volumes were about 75 per cent above October levels. - Additional reporting from Reuters and Bloomberg