European shares closed at a record high on Friday, driven by defence and insurance stocks, as investors turned optimistic with just a handful of trading days left before the end of the year after a sell-off earlier this week.
The pan-European Stoxx 600 rose 0.4 per cent to 587.50, a day after logging its best one-day performance in more than three weeks and ending the week up 1.7 per cent.
Dublin
The Iseq All-Share index ended the session up 0.2 per cent at 13,105.03.
Banking stocks edged higher, in line with European peers, as sector followers continued to digest a hawkish tone from the European Central Bank (ECB) after opting to leave official interest rates unchanged on Thursday. Financial markets are now pricing in a rates increase next year, which would boost banks’ income.
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Higher rates tend to have the opposite effect on sentiment towards property stocks. Cairn Homes lost 1.7 per cent to €2.01.
Travel-related stocks were also out of sorts, with Ryanair off 0.4 per cent at €29.50, Irish Continental Group (ICG) falling 1.6 per cent to €6.06 and Hostelworld declining 1.3 per cent.
London
The FTSE 100 advanced 0.6 per cent. Miner Anglo American edged up 0.4 per cent after reporting that it was striving to wrap up the sale of its nickel business and that it had restarted efforts to dispose of its remaining coal operation.
Carnival, on the FTSE 250, jumped 17 per cent. The Florida-based cruise operator’s pretax profit jumped 45 per cent in the financial year ended November 30. Carnival also announced the reinstatement of dividends, declaring a quarterly payout of 15 US cents.
In small caps, Seraphim Space rose 8.8 per cent. The space technology-focused investor’s largest holding, ICEYE, has won a €1.7 billion deal through a joint venture with arms firm Rheinmetall. The JV will provide the German armed forces with radar services.
Europe
Aerospace and defence stocks led sector gains, with heavyweight banks adding 0.8 per cent. British lenders Standard Chartered, Barclays and HSBC all gained between 0.9 per cent and 1.4 per cent.
The banking index has risen 65 per cent so far this year, while defence is up almost 60 per cent.
Personal and household goods and retail shares were the biggest decliners. Puma, Adidas and JD Sports fell between 1.2 per cent and 3.5 per cent after peer Nike tumbled on the impact of weak China sales on its quarterly results.
New York
US stocks were ahead in midafternoon trading in New Yor as a rebound in technology shares gained momentum heading into the final weeks of the year, while Nike tumbled after weak China sales weighed on its quarterly results.
Megacaps extended gains from Thursday, when chipmaker Micron Technology’s strong forecasts reignited optimism around AI-related shares, which had recently come under pressure over lofty valuations and funding concerns.
December has traditionally been a strong period for stock markets. Since 1950, the “Santa Claus rally” has seen the S&P 500 rise an average 1.3 per cent over the last five trading days of the year and the first two in January, according to the Stock Trader’s Almanac.
Not all was bright though. Nike shares slumped after the sportswear giant reported a drop in gross margins for the second consecutive quarter, hurt by poor sales in China and efforts to reset its product mix.
Lamb Weston slid after the frozen fries supplier maintained annual sales forecast for the second time this year amid rising economic uncertainty.
Conagra fell after the Slim Jim meat snacks maker reiterated annual sales target after a muted second quarter.
Investors also drew comfort from US consumer prices rising less than expected in November, but some analysts flagged that the data could be distorted due to the 43-day government shutdown that prevented the collection of October data.
Oracle jumped after TikTok’s Chinese owner, ByteDance, signed binding agreements to hand control of the short video app’s U.S. operations to a group of investors, including the cloud computing giant.
- Additional reporting, Reuters, Press Association
