European shares ended marginally higher on Monday, with defence stocks in the lead, but gains remained in check as investors awaited economic data against an uncertain backdrop on the outlook for interest rate cuts.
Limiting gains on equities, euro zone sovereign bond yields climbed for the second day, with markets awaiting fresh euro zone business activity data later in the week, which could provide clues on the European Central Bank’s monetary path.
Dublin
The Iseq picked up where it left off at the end of last week, with the lacklustre mood resulting in a further 0.2 per cent decline in the index.
Among gainers, Kingspan was the most notable performer, with the insulation maker climbing 1.4 per cent to €90.25. Bank of Ireland rose 0.4 per cent to €10.42, while packaging group Smurfit Kappa also managed to finish in the green, adding 0.2 per cent to €44.39.
But Ryanair declined 1.3 per cent to close at €18.10 after chief executive Michael O’Leary said that a “recessionary feel around Europe” could be a factor in slower-than-expected growth in airfares, while AIB slid 0.8 per cent to €5.09.
London
London equities managed to eke out some gains after two consecutive sessions of losses, helped by a rally among metal miners and defence stocks, while investors awaited a key domestic inflation reading later in the week.
The blue-chip FTSE 100 shook off its recent slump to climb 0.1 per cent while the mid-cap FTSE 250 closed 0.6 per cent higher, at its highest in more than two years.
Precious metal miners led sectoral gains with a 2.8 per cent rise, as spot gold prices surged to record highs. Industrial metal miners also advanced 0.5 per cent after copper hit an all-time peak.
[ Dublin-based Keywords Studios soars amid £2.2bn takeover bidOpens in new window ]
Keywords Studios surged 55.2 per cent as European private equity group EQT was in advanced talks to buy the Dublin-based video game services company, while EasyJet fell 3.2 per cent after Mr O’Leary’s comments.
Europe
The pan-European Stoxx 600 index edged up 0.1 per cent, closing a nudge below record highs hit last week. The aerospace and defence sector led sectoral gains with a 1.9 per cent rise.
The technology sector climbed 0.8 per cent in the lead up to AI bellwether Nvidia’s first-quarter results expected later in the week out of the US.
Late last week board member Isabel Schnabel said in an interview that the ECB might slash interest rates in June, but should be cautious about further cuts in borrowing costs given uncertainty over the outlook.
[ ECB’s Schnabel sounds cautious note on pace of rate cutsOpens in new window ]
Italian stocks slid 1.6 per cent, with banks such as Banca Popolare di Sondrio and Banco BPM among the top decliners.
Volkswagen dipped 1.7 per cent after Morgan Stanley downgraded the automaker to “underweight” from “equal weight” and turned cautious on German carmakers overall, pointing to shrinking margins and the potential for trade disputes.
Airbus added 1.2 per cent after Saudia Group, owner of the Saudia airline and budget carrier Flyadeal, announced an order for 105 narrow-body aircraft, with the company describing this as the largest-ever order from a Saudi airline.
Stock markets in Switzerland, Sweden and Denmark were closed for Whit Monday holiday.
US
The tech-heavy Nasdaq climbed to a record high, boosted by chipmakers, with much-anticipated quarterly results from Nvidia and the Federal Reserve’s policy meeting minutes this week likely to test Wall Street’s record-breaking run.
Upbeat corporate earnings and softer-than-expected inflation data have supported hopes for interest rate cuts this year. The S&P 500 inched closer to an all-time high, while the blue-chip Dow reclaimed the 40,000-point level.
Nvidia jumped 2 per cent, with at least three brokerages raising their price targets, while Micron Technology climbed 3.6 per cent after Morgan Stanley upgraded the memory chipmaker to “equal weight” from “underweight”.
Additional reporting: Reuters
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
