European stocks rose for a third straight session, with sentiment boosted by upbeat global economic data and bets that the Federal Reserve will reduce interest rates next month.
The Stoxx Europe 600 index was up by 1 per cent although some analysts cautioned investors against complacency. Insurance and technology shares outperformed, while travel and leisure and retail underperformed.
Equities are recovering after a rough start to August as resilient economic data calm concerns about a US recession. Figures on Wednesday showed easing US inflation, and were followed by encouraging data from Japan and China on Thursday.
[ US inflation drops to 2.9%, fuelling hopes of rate cutOpens in new window ]
“We think the US recession fears are exaggerated and are cautiously optimistic,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg, who used the sell-off last week to increase exposure to stocks. “Equity markets now correlate positively with macro surprises, which means good data are good for stocks and bad data not.”
Traders are now pricing in rate cuts of about 100 basis points from the Fed by the end of the year, according to swaps data.
DUBLIN
Both AIB and Bank of Ireland rose on a strong day for financials. The rival banks were up 3.4 and 5.7 per cent respectively. The gains came on foot of a report that officials told former minister for finance Michael McGrath that a further sale of State-held shares in AIB would not create the legal requirement to revisit the salary cap for senior staff. Elsewhere, Iseq heavyweight Ryanair was up 1.3 per cent despite bad sentiment for the travel sector generally. Mining group Kenmare saw shares bounce 5 per cent on new chief Tom Hickey’s first day in the job.
LONDON
London’s FTSE 100 moved higher on Thursday, but lagged behind its international peers as global stock markets enjoyed a rebound. The blue-chip index was up 66.3 points, or 0.8 per cent, to close at 8,347, with financial and banking firms among the day’s biggest risers.
In company news, shares in Mecca Bingo owner Rank Group were given a boost after the company revealed it returned to a pretax profit over the past year. The group had been hammered by Covid and the cost-of-living squeeze in recent years, so hailed its recovery and return to profitability.
Elsewhere, insurance group Admiral moved to the top of the FTSE 100 after reporting soaring profits for the first half of the year. The firm said stronger earnings and revenues were mainly driven by a 12 per cent jump in its number of customers, which hit more than 10.5 million.
EUROPE
Top European share indices enjoyed more gains on Thursday. In Frankfurt, the Dax was up 1.66 per cent and in Paris, the Cac 40 closed 1.23 per cent higher.
Banks, retail and automobiles were also among the top performers, although most sectors gained on the day. Dutch payments company Adyen was the strongest individual performer, jumping 12 per cent to top the Stoxx 600 after market share gains helped it beat half-year core profit expectations. Swedish games developer Embracer fell more than 7 per cent after reporting a 50 per cent drop in first-quarter operating profit.
NEW YORK
Wall Street’s main indexes rose about 1 per cent on Thursday as retail sales data for July indicated resilient consumer spending, allaying fears of an imminent recession in the world’s biggest economy. All megacap and growth stocks edged up, with Tesla leading the pack, rising 4.1 per cent.
Meanwhile, retail bellwether Walmart added 7.5 per cent after raising its annual profit forecast for the second time this year, as Americans kept flocking to its stores for inexpensive essentials. Rival Target also jumped 4.8 per cent, while Costco advanced 2 per cent.
Among other movers, Cisco Systems rose 9.4 per cent after it forecast better-than-expected first-quarter revenue and said it was cutting 7 per cent of its global workforce.
Nike climbed 3.3 per cent as billionaire investor William Ackman built new stakes in the sportswear company, while Ulta Beauty jumped 10.4 per cent after Warren Buffett’s Berkshire Hathaway acquired a stake in the cosmetics store chain.
– Additional reporting: Reuters/Bloomberg
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