Business

European shares rise after Swiss rate cut and mounting talk of Bank of England move

Iseq All-Share index dipped 0.4 per cent to 9,545.64, with heavyweights Kerry and Ryanair declining

Bank of England kept its main interest rate unchanged but the prospect of a future rate cut moved closer on Thursday. Photograph: Getty

Joe Brennan
Thu Jun 20 2024 - 18:50

European shares advanced on Thursday with broad-based gains as markets tracked a global upbeat sentiment, while shares of British, Swiss and Norwegian stocks were in focus after their respective central bank decisions.

The pan-European Stoxx 600 ended up 0.9 per cent to hit a week’s high, led by a 1.8 per cent rise in technology stocks, while real estate stocks were another boost, rising 1.7 per cent.

The Swiss National Bank cut interest rates by a quarter of a percentage point to 1.25 per cent, maintaining its position as a front-runner in the global policy easing cycle.

The surprise cut to rates, the second cut since March, was justified by a fall in inflation.

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Norway’s central bank, on the other hand, opted to hold its key policy interest rate at a 16-year high of 4.5 per cent and said a cut was expected in 2025. Norwegian stocks added 0.4 per cent.

The Bank of England kept its main interest rate unchanged, but the prospect of a future rate cut moved closer as some policymakers said their thinking was now “finely balanced”.

Dublin

The Iseq All-Share index dipped 0.4 per cent to 9,545.64, with heavyweights Kerry and Ryanair declining.

Banks were generally higher, though, with AIB edging 0.2 per cent ahead to €5.10 and Bank of Ireland advancing 0.6 per cent to €10.11.

Ires Reit dipped 1.67 per cent to 90.3 cents as investors absorbed news that the company’s founding shareholder Capreit had sold its remaining 9.7 per cent stake on the market.

Datalex advanced as much as 1.8 per cent during trading as the travel retail software company confirmed it plans to raise equity to repay €13 million of loans from its largest shareholder, Dermot Demond.

London

The FTSE 100 rose 0.8 per cent as the Bank of England kept rates on hold as expected, with traders raising the prospects of a rate cut after policymakers’ comments.

Markets now see a 46.5 per cent chance of a rate cut in August, compared with 30 per cent before the rate decision.

Shares of Ocado fell 12 per cent after the online supermarket’s Canadian partner paused a planned opening of a Vancouver warehouse.

CMC Markets soared nearly 12.8 per cent after the trading platform forecast higher operating income in 2025, aided by strong retail and institutional trading and tight cost control measures.

Tate & Lyle fell 9 per cent after the sweetener maker struck a $1.8 billion deal to buy US-based CP Kelco from JM Huber Corp. Tate & Lyle’s shares were also trading ex-dividend.

Europe

Lifting the tech index was ASM International (ASMI), which jumped 5.3 per cent after Morgan Stanley upgraded the semiconductor equipment manufacturer to the equivalent of a buy.

Global sentiment also received a lift as US equities extended their gains on the back of chip designer Nvidia, and as investors parsed interest rate decisions from three central banks in Europe.

Evotec jumped 13.9 per cent after a media report that the German biotech firm is speaking to advisers after it was seen as a potential takeover target.

Millennium BPC rose 8.3 per cent after Jefferies upgraded the Portuguese bank’s rating to buy.

Tate & Lyle dropped 9 per cent after the British food ingredients maker said it will buy US-based CP Kelco for $1.8 billion from JM Huber Corp. Its shares were trading ex-dividend.

New York

The S&P 500 and the Nasdaq hit record highs on Thursday, boosted by strong gains in Nvidia, while investors assessed recent economic data and commentary from Federal Reserve officials to gauge the timing of interest-rate cuts this year.

Nvidia dethroned Microsoft on Tuesday to become the world’s most valuable company. The AI chip leader’s continued rally, coupled with softer-than-expected US retail sales data.

Kroger fell after the retail group struck a cautious tone on near-term consumer spending, as it reaffirmed its full-year same-store sales and profit forecasts despite topping first-quarter estimates.

Trump Media & Technology Group tumbled on potential equity dilution after the US Securities and Exchange Commission declared effective the company’s filing for a resale of certain shares and warrants, giving it about $247 million in proceeds. – Additional reporting, Reuters

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

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