Business

European shares rise on mounting hopes of US rate cuts

Iseq All-Share index jumps 1.2 per cent, with home builders standing out among performers

Federal Reserve chair Jerome Powell has pointed to recent data that represented “significant progress” on inflation. Photograph: Getty

Joe Brennan
Wed Jul 3 2024 - 17:55

European shares rose on Wednesday, as dovish comments from US Federal Reserve chair Jerome Powell and fresh US economic data firmed rate cut expectations, while investors awaited the second round of the French vote and national elections in the UK.

The pan-European STOXX 600 index closed 0.7 per cent higher.

Mr Powell said on Tuesday that recent data represented “significant progress” on inflation.

DUBLIN

The Iseq All-Share index jumped 1.2 per cent to 9,425.80, with home builders standing out among gainers after Cairn Homes published a solid trading update saying its forward order book from homebuyers now stands at €1.2 billion in value, up from €1.05 billion in mid-May.

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Shares in Cairn jumped 8.1 per cent to €1.70, while rival Glenveagh Properties added 3.8 per cent to €1.33.

Datalex was also in focus as Seán O’Driscoll, the former chief executive of Glen Dimplex, revealed that he has increased his stake in the travel retail software company to 6.1 per cent. Still, shares in the company drifted 0.9 per cent lower to 46 cents. The company is expected to launch a share sale later this year to refinance loans.

Banks were mixed, with AIB up 0.2 per cent at €4.97, while Bank of Ireland dipped 0.2 per cent to €9.62.

LONDON

The blue-chip FTSE 100 gained 0.6 per cent and saw the best day in nearly two weeks, after closing at a more than two-month low in the previous session.The market’s attention is riveted on the UK vote, where opinion polls indicate it is almost a sure bet the Labour Party will seize power, ending 14 years of Conservative government.

[ Tories warn of Labour landslide in final day of UK election campaigning ]

The mid-cap FTSE 250 jumped 1.7 per cent in its best day this year, snapping a three-session losing streak.

Precious and industrial metal miners were among the top gainers, rising 4 per cent and 2.4 per cent, respectively, tracking higher gold and copper prices.

Among individual stocks, British Airways owner IAG gained 5.5 per cent after the EU antitrust regulator approved Lufthansa ‘s purchase of 41 per cent of Italy’s ITA Airways, boosting rival IAG’s hopes for its takeover of Air Europa.

JD Sports slumped 4 per cent to hit the bottom of the FTSE 100 index, after Barclays downgraded the retailer to underweight, the equivalent of a sell recommendation.

EUROPE

Technology stocks added 1.6 per cent, underpinned by Dutch semiconductor equipment makers ASML Holding and BE Semiconductor Industries jumping 2 per cent and 7.3 per cent, respectively.

Miners were the top sectoral gainers, advancing 2.2 per cent, after copper prices climbed on a softer dollar amid renewed hopes of US rate cuts and signs of firmer demand from top consumer China.

French stocks climbed 1.2 per cent as opponents of France’s National Rally (RN) stepped up their bid to block the far-right party from power, with more candidates agreeing to pull out of this weekend’s run-off election to avoid splitting the anti-RN vote.

Danish shipping giant Maersk rose 3.7 per cent after it agreed to sell its offshore marine service provider Maersk Supply Service to Norway’s DOF Group for $1.11 billion (€1.02 billion).

Bpost tumbled 7.5 per cent after the Belgian postal operator issued a downbeat full-year earnings forecast, citing unfavourable market conditions in North America.

NEW YORK

Wall Street shares were ahead in early afternoon trading in a holiday-shortened trading session, as data pointing to a softening economy raised hopes for a September start to the Federal Reserve’s policy easing.

The equity market will close early on Wednesday and stay shut on Thursday on account of US Independence Day, keeping trading volumes thin throughout the week.

Tesla jumped to a near six-month high after a more than 10 per cent gain on Tuesday following a smaller-than-expected drop in second-quarter vehicle deliveries.

The Philadelphia SE Semiconductor Index rose, helped by gains in the US listing of Taiwan Semiconductor Manufacturing and Broadcom.

Paramount Global jumped after Shari Redstone’s National Amusements reached a preliminary deal to sell its controlling interest in the media giant to David Ellison’s Skydance Media.

– Additional reporting, Reuters

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

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