European shares moved higher on Wednesday as investors focused on an imminent announcement of an interest-rate cut by the European Central Bank (ECB) and prepared to watch out for signs from officials on the pace at which it will follow this up with further reductions.
The pan-European Stoxx 600 closed 0.8 per cent higher after falling about 0.5 per cent in the previous session. The technology sector led the charge with a 3.7 per cent gain, its best single-day performance in more than four months.
The ECB is expected to cut its main interest rates by a quarter of a point on Thursday afternoon, to leave its deposit rate at 3.75 per cent and key lending rate at 4.25 per cent.
Dublin
The Iseq All-Share index closed virtually unchanged at 9,940.36. AIB dipped 0.1 per cent to €5.05, while Bank of Ireland declined 0.3 per cent to €10.12. Higher official rates – particularly deposit rates – have driven the two Irish banks’ income higher in recent years.
However, housebuilders were in demand, with Cairn Homes gaining 0.8 per cent to €1.72 and Glenveagh Properties advancing 1.2 per cent to €1.40 as lower borrowing costs are seen as underpinning the sector.
Corre Energy slid 7.5 per cent to a new low of 37 cent as the energy storage developer for renewable power continues to seek major outside investment, after raising €2.76 million in a cash call in recent weeks to tide it over.
London
The FTSE 100 closed up 0.2 per cent, buoyed by economic data cementing bets for a September rate cut by the US Federal Reserve, while investors keenly awaited the ECB’s interest rate decision.
Signs of cooling in the US labour market, where data revealed low job openings and a less-than-expected rise in private payrolls reinforced predictions of a September rate cut.
“The wheel of speculation over when interest rates will come in the US has stopped in a more positive position, leading to expectations that cuts are still on the cards at the Fed,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“It has had a knock-on effect on the globally focused FTSE 100,” Streeter added.
In London, the automobile and parts sector led gains with a 2.9 per cent rise, while medical equipment and pharma rose 2.2 per cent and 1.2 per cent respectively.
However, discount chain B&M slid 7.3 per cent after issuing preliminary full-year results.
Centrica fell 4.8 per cent after the utilities group said profitability would be strongly weighted towards the first half of the year.
Europe
ASML jumped 8.1 per cent after a Jefferies analyst report cited comments from chief financial officer Roger Dassen suggesting he was positive about the possibility of orders coming through from top customer TSMC in the coming quarters.
Other chip-related stocks BE Semiconductor Industries and ASMI were up 4.7 per cent each.
Among other stocks, Inditex jumped 3.7 per cent after the Zara owner reported a pickup in recent sales from its spring/summer collections.
Elekta slumped 18 per cent after the Swedish radiation therapy equipment maker posted a bigger-than-expected drop in fourth-quarter profit.
New York
The S&P 500 and the Nasdaq were ahead in early afternoon trading as investors strengthened bets for an earlier-than-expected start to the Federal Reserve’s easing cycle.
Megacaps such as Nvidia, Microsoft and Amazon were among advancing stocks.
Expectations for a September rate reduction by the Fed are now at nearly 69 per cent, compared with below 50 per cent last week, according to the CME’s FedWatch tool.
Intel gained after buyout firm Apollo Global Management agreed to purchase a 49 per cent equity interest in its Fab 34 facility in Leixlip, Co Kildare, for $11 billion (€10.1 billion).
Cybersecurity technology group CrowdStrike jumped after forecasting second-quarter revenue above estimates when markets closed on Tuesday, helped by strong demand for its products. – 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
