European stocks rise again but rally loses traction

Automotive manufacturer stocks helped drive European shares to new highs on Wednesday, even as a new year rally appeared to be running out of gas due to concerns over Covid-19 and slowing economic growth.

The European automobile sub-index was the best sectoral performer, jumping 2.7 per cent to a record high as investors expected production to roar back from a semiconductor shortage, with car sales also likely to improve.

DUBLIN

The Iseq rose 0.5 per cent in line with the positive trend across Europe. Ryanair held onto the near 9 per cent gain it secured on Tuesday and added a further 1 per cent to close at €16.76. AIB advanced 0.6 per cent to €2.25, while packaging company Smurfit Kappa was another climber, adding 1.6 per cent to €50.02.

Bank of Ireland had a more sluggish session, dropping 0.3 per cent to €5.28, however, while Glenveagh Properties declined 0.65 per cent to €1.23 after it released a trading update. The company announced a 36 per cent rise in revenue compared to its pre-pandemic figures, but highlighted inflation challenges.

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Another property stock, Ires Reit, added 0.3 per cent to €1.69 after the State's largest private residential landlord acquired 152 apartments in Clontarf, Dublin.

Elsewhere, building materials group CRH edged down 0.2 per cent to €47.94, while insulation maker Kingspan added 2.1 per cent to €103.65.

LONDON

The FTSE 100 extended gains for the second straight session, gaining almost 0.2 per cent as a rally in oil and mining stocks helped counter early gloom amid concerns about tighter US monetary policy. The mid-cap FTSE 250 fell 0.5 per cent.

Oil majors BP and Royal Dutch Shell gained about 1.5 per cent, extending gains from the previous session, after OPEC+ producers stuck to an agreed output target rise for February.

London Stock Exchange Group gained 1.7 per cent after analysts at Citigroup upgraded its shares to "buy", while online grocer Ocado and plumbing products distributor Ferguson added 4.9 per cent and 0.5 per cent respectively following rating upgrades by Berenberg.

EUROPE 

The continent-wide Stoxx 600 index rose 0.1 per cent, its third consecutive record closing high. But a recent rally appeared to be losing traction, amid concerns over the omicron coronavirus variant, rising interest rates and mixed economic data.

Germany's BMW added 2.2 per cent after it achieved record sales from its BMW brand in 2021. Renault jumped 5.3 per cent to the top of France's Cac 40 after Qualcomm announced deals to supply chips to automakers including the French carmaker.

The Dax added 0.7 per cent in Frankfurt, while the Cac 40 rose 0.8 per cent in Paris.

Mining stocks rose 1.6 per cent, tracking stronger commodity prices as investors bet that demand would recover from a Covid-induced lull. Other economically-exposed sectors also gained, with banks up 0.2 per cent on expectations of higher interest rates.

Among other movers, Nestle slipped 2.7 per cent, and was among the top drags on the Stoxx 600 after analysts at Jefferies downgraded the firm on expectations that its margins would remain under pressure from commodity cost inflation.

NEW YORK

The Dow Jones hit a record high as investors swapped technology stocks for economy-linked cyclicals that stand to benefit from a high interest rate environment, ahead of the release of minutes from the Federal Reserve’s December meeting at 7pm Irish time.

Tech giants including Apple, Google-owner Alphabet, Amazon. com, Meta and Microsoft fell between 0.5 per cent and 2.2 per cent to weigh the most on the S&P 500 and the Nasdaq indexes.

Salesforce. com slid 5.4 per cent after analysts at UBS lowered its rating on the stock to "neutral" from "buy". Intel jumped 4.1 per cent and was the top percentage gainer on the Dow after Northland Capital Markets upgraded the chip maker's stock to "outperform". – Additional reporting: Reuters