European stocks closed higher on Wednesday after signs of fast-cooling inflation in the UK boosted stocks in London, while shares of Belgian pharmaceutical company Argenx sank after a failed drug study.
Other main regional markets, however, paused after a recent run of gains as investors weighed comments from European Central Bank (ECB) policymakers.
Two of the ECB’s most prominent hawks including Bundesbank President Joachim Nagel and his Dutch colleague Klaas Knot joined the chorus of policymakers trying to talk traders out of betting on upcoming interest rate cuts.
Dublin
The Iseq Overall Index edged 0.8 per cent higher as Flutter Entertainment, Bank of Ireland and Kerry all advanced. The Paddy Power owner, which is set to delist from Euronext Dublin in 2024, climbed 2.7 per cent to finish at €165.25.
Bank of Ireland closed up 0.65 per cent to €8.25, while Ryanair nudged up 0.2 per cent to €19.03 on a good day for travel and leisure stocks across Europe.
Food group Kerry rose 0.9 per cent to €75.46. But Kingspan was among the fallers, declining 1 per cent to €77.90
London
The FTSE 100 index jumped 1 per cent after data showed UK inflation plunged in November to its lowest rate in over two years, driving up bets that the Bank of England will cut interest rates in the first half of next year.
The blue-chip index touched its highest level since May 24th earlier in the session. The pound dropped 0.5 per cent after official data revealed the surprisingly large drop in inflation. The FTSE 250 midcap index also added 1.6 per cent, hitting a more than nine-month high.
Rate-sensitive real estate and real estate investment trusts were the top gainers, advancing 2.4 per cent and 2.7 per cent respectively.
Among individual stocks, Intertek Group jumped 3.7 per cent after analysts at Exane BNP Paribas upgraded the product testing company’s rating to “outperform” from “underperform”. Petrofac soared 42.4 per cent after the oilfield services provider secured a $1.4 billion contract.
Europe
The pan-European Stoxx 600 edged up 0.3 per cent. Data showed German producer prices fell more than expected in November, a day after another set confirmed that euro zone inflation slowed sharply to 2.4 per cent last month on a year-on-year basis.
Overall, hopes of monetary policy easing next year have pushed the Stoxx 600 up almost 13 per cent year-to-date, with the German DAX and France’s CAC 40 trading near record highs.
Argenx slumped 25.6 per cent to post its biggest percentage loss on record after its autoimmune drug failed a study test it in patients with two skin conditions. The drop dragged Belgium’s blue-chip BEL20 index down 2.4 per cent.
Telefonica climbed 3.2 per cent to top the Stoxx 600 after the Spanish government said it would buy a stake of up to 10 per cent in the company in a counterbalance to a similar acquisition by Saudi Arabia’s STC.
Deutsche Post lost 1.9 per cent after US peer FedEx cut its full-year revenue forecast and reported lower-than-expected quarterly profit.
US
The benchmark S&P 500 and the blue-chip Dow were nearly flat as investors took a breather from a rally that was sparked by the Federal Reserve’s likely pivot to a dovish policy.
Alphabet climbed 3.1 per cent to an over one-and-a-half year high after a report said Google is planning to reorganise a big part of its 30,000-person advertising sales unit. The three main indexes had advanced over 2 per cent since the Fed’s December 13th meeting where policymakers projected lower policy rates by the end of 2024.
FedEx slid 11 per cent after the global delivery firm cut its full-year revenue forecast and reported quarterly profit that fell far short of analysts’ targets. - Additional reporting Reuters
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
