European shares rose on Wednesday, as investors awaited a key US inflation report to be published later this week.
Traders across the globe are waiting for the latest data on US consumer prices which will be published on Thursday which may show inflation in the world’s biggest economy is slowing. That report is likely to guide the US Federal Reserve on whether it will continue to raise interest rates or ease the pace of rate hikes.
Dublin
The Iseq Overall Index little changed at 7,703.28. Of the major companies, Kerry Group led the market higher after it said it had agreed to sell its ingredients business for about €500 million to US private equity firm Advent International. The rationale for offloading a “lower growth and lower margin profile business stacks up”, Goodbody analyst Jason Molins said. It rose 2.24 per cent to €88.36.
Cairn Homes added 1.16 per cent to close at 96 cent, continuing its strong run this week after a positive trading update on Monday. Construction materials giant CRH added 1.19 per cent to reach €40.85.
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Banks struggled throughout the session. AIB fell 5 per cent to €3.67, Bank of Ireland slid 3.56 per cent to €9.21 and Permanent TSB fell 2.26 per cent to €1.95.
London
The FTSE 100 rose 0.4 per cent to 7,724.98 as the index advanced to the highest closing level in at least a year. Oil major Shell led the market higher, closing up 1.2 per cent. Clothier retailer JD Sports rose 7.1 per cent, after what was seen as a particularly strong trading update.
Barratt Developments fell 3 per cent after the home builder said it would build fewer houses this year as the market in the UK continues to slow.
Europe
European equities rose on optimism around cooling inflation, ahead of the US CPI report. France’s CAC40 index added 0.8 per cent to close at 6,924.12 while Germany’s Dax index jumped 1.14 per cent to reach 14,943.05.
The Stoxx Europe 600 Index added 0.4 per cent by the close in London. Real estate led the advance as bond yields slipped, while retail shares also outperformed following the JD Sports update. Insurers were hit by the record drop in Direct Line after it scrapped its dividend due to a jump in claims.
“My feeling is that we are close to, or at, peak inflation now,” said Haig Bathgate, head of investments at Atomos, adding that European equities should therefore push higher, potentially driven by gains for growth stocks. Still, he cautioned that there could be more volatility to come, ahead of tomorrow’s data: “If we get a surprise print where inflation moves up sharply, then markets will definitely sell off.”
New York
Wall Street’s main indexes rose on Wednesday, led by gains in rate-sensitive growth stocks, as the focus shifts to a key inflation reading due later this week, which would provide more clues on the Federal Reserve’s rate hike trajectory.
Nearly all major S&P sectoral indexes were trading in the green, with Amazon and Tesla up 4 per cent and 3.8 per cent respectively, and among top boosts to the benchmark S&P 500 index.
Gains in both those stocks pushed up the consumer discretionary sector nearly 2 per cent. Only healthcare stocks were an outlier, down marginally.
By mid-afternoon Irish time, the Dow Jones Industrial Average was up 0.3 per cent while the S&P 500 had gained 0.5 per cent. The tech-heavy Nasdaq had gained 0.65 per cent.
Home goods retailer Bed Bath & Beyond jumped 31.2 per cent, after logging gains in the previous session, despite bleak quarterly results as retail investors speculated it could be a potential acquisition target and as short-sellers closed out bets.
American Airlines and Spirit Airlines reversed premarket losses to rise between 0.8 per cent and 2.5 per cent, as US flights were slowly beginning to resume departures and a ground stop was lifted after the Federal Aviation Administration scrambled to fix a system outage overnight. – Additional reporting: Bloomberg/Reuters
