European stocks reach fresh highs after gains for bank shares

European stocks finished at record highs on Monday, carrying over momentum from October’s gains on the back of strong earnings and as expectations of interest rate increases supported bank stocks.

Equity markets were boosted by a 1.4 per cent jump in bank stocks as euro zone bond yields surged on expectations of rate hikes by the European Central Bank (ECB) next year. The bank sector touched its highest level in more than two years, and was the best performer for the day.

DUBLIN

The Iseq rose almost 0.8 per cent per cent, in line with the positive mood across Europe, with key stocks performing well.

Ryanair added 1.15 per cent after it said revenues rose 83 per cent in the six months to the end of September, the first half of its financial year, and flagged that it would lose €100 million-€200 million in its current financial year, having previously said it would break even or return a small loss.

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European stocks inch to record levels buoyed by strong results

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The airline, which closed at €17.15 on the Dublin market, also said it was considering delisting from the London Stock Exchange.

Elsewhere, building materials group CRH added 1 per cent to €41.89, while packaging company Smurfit Kappa climbed 1.4 per cent to €45.94.

Bank of Ireland finished flat at €5.16, but AIB joined in the rise for European bank stocks, closing up 2.6 per cent at €2.41.

LONDON

London’s FTSE 100 index marked its highest close in 20 months on Monday, aided by gains in most bank stocks and a weaker pound.

The FTSE 100 index rose 0.8 per cent to record its highest close since February 2020, with banks Standard Chartered and Lloyds Banking Group among the top boosts.

Barclays fell 1.1 per cent, however, after it announced the departure of chief executive Jes Staley following a dispute with British financial regulators over how he described his ties with convicted sex offender Jeffrey Epstein.

The mid-cap FTSE 250 index advanced 0.6 per cent.

Investor focus is on the Bank of England meeting on Thursday, with swaps pricing pointing to a better-than-even chance of the central bank raising interest rates for the first time since the pandemic.

EUROPE

The pan-European Stoxx 600 closed up 0.7 per cent at a record high of 478.87 points. The bank-heavy Italian and Spanish indexes rose 1.2 per cent and 1.4 per cent, respectively, while the German Dax added 0.8 per cent and the French Cac 40 was 0.9 per cent higher.

Shares in German conglomerate Thyssenkrupp and steelmaker Salzgitter rose 2.4 per cent and 1.9 per cent respectively after the US and the European Union ended a dispute over steel and aluminium tariffs.

French drugmaker Sanofi gained 2.2 per cent after analysts at HSBC upgraded the stock to "buy".

Volkswagen inched up 0.4 per cent after saying its Skoda Auto would resume production on Sunday following a two-week outage caused by the chip crisis.

Pandora fell 1.2 per cent after an earnings update from the world's largest jewellery-maker showed weak sales growth at its own stores in the third quarter.

US

The Nasdaq index hovered at a record high on Monday boosted by gains in Tesla and Meta Platforms, although investors refrained from making big bets ahead of the Federal Reserve's potential move to start paring pandemic-era support for the world's largest economy.

The blue-chip Dow and the benchmark S&P 500 index scaled intraday record peaks earlier in the session, with the Dow hitting 36,000 points for the first time.

Tesla rose 4.6 per cent to a record high after it notched a trillion dollars in market capitalisation last week, while Meta Platforms, formerly Facebook, added 2.6 per cent to provide the biggest boost to the S&P 500 and the Nasdaq.

Harley-Davidson jumped 6.8 per cent after the EU removed retaliatory tariffs on US products including whisky, power boats and the company's motorcycles.

– Additional reporting: Reuters