Business

Markets nudge upwards ahead of Fed rate cut announcement

On Iseq Dalata shares rise as do those of housebuilder Glenveagh

Traders work on the New York Stock Exchange floor on Wednesday. The Dow was up almost 200 points in morning trading before the Federal Reserve meeting on interest rates. Photograph: Spencer Platt/Getty Images
Traders work on the New York Stock Exchange floor on Wednesday. The Dow was up almost 200 points in morning trading before the Federal Reserve meeting on interest rates. Photograph: Spencer Platt/Getty Images
Fiona Keeley
Wed Dec 18 2024 - 18:49

Most markets edged upwards on Thursday as they anticipated a rate cut announcement from the US Federal Reserve scheduled for Wednesday evening and possible clues as to how the central bank may act in 2025.

Dublin

The overall Iseq index was up 0.40 per cent on Wednesday and finished at a total price of €9,728.61. Dalata Hotels rose 8.25 per cent, finishing at €4.72 a share.

It comes as the hotel group released a trading update on Wednesday morning saying it expected its full-year earnings to exceed €232 million, a 4 per cent increase on 2023.

Kingspan rose 2.68 per cent to €70.85 a share. Home builders Glenveagh Properties increased 1.90 per cent to €1.60. Marine transport and shipping group Irish Continental recovered some of its losses from Tuesday, rising 1.55 per cent to €5.24 a share.

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London

The FTSE 100 index edged up 0.1 per cent, but still hovered around the more than three-week low hit on Tuesday.

The market was led by banks, while investors digested key inflation data that could influence the future course of domestic monetary policy and awaited the Federal Reserve’s interest-rate decision.

Banks led the sectorial gains, up 1.2 per cent, while heavyweight energy companies were up 0.4 per cent, boosted by higher crude oil prices.

Meanwhile, healthcare companies were the most impacted, with an about 1 per cent decline, led by AstraZeneca, which fell 1.5 per cent after US drugmaker Merck signed an up to $2 billion deal for oral weight-loss drug with China’s Hansoh.

Just a day ahead of the Bank of England’s rate decision, data showed British inflation rose to an eight-month high in November. But offering some relief was an underlying measure of price growth holding steady, weighing on the sterling and, in turn, also boosting stocks.

The Bank of England is widely expected to hold rates steady this week, while the central bank is expected to ease borrowing costs by about 50 basis points in 2025, data compiled by LSEG showed.

Europe

The pan-European Stoxx 600 closed 0.2 per cent up, snapping a four-day losing streak, with technology outperforming, up 1.1 per cent.

French carmaker Renault rose 5.2 per cent, leading gains on the Stoxx 600, after sources told Reuters that Honda and Nissan were in talks to deepen ties, including a possible merger.

Renault is Nissan’s largest shareholder and said it was open in principle to a deal.

Paris’s Cac 40 was up 0.2 per cent, roughly in line with the Stoxx 600. Euro-zone inflation came in at 2.2 per cent in November, a final reading showed, a slight downgrade from a previous estimate of 2.3 per cent.

New York

At midday, the Dow Jones was up 0.37 per cent, the S&P 500 rose 0.2 per cent and the Nasdaq increased 0.2 per cent.

With a rate cut expected by most investors, more focus is on the Fed’s summary of economic projections, which includes policymakers’ forecasts for the economy and the “dot plot” of their expectations for interest rates over the longer term.

Comments from Fed chair Jerome Powell will also be watched for clues on how the central bank will determine policy next year, as recent economic data has shown both strong growth and persistent inflation that could keep the Fed from cutting rates as much as previously forecast.

Tesla edged up 1 per cent, reversing early losses, after rising over 14 per cent in the last three sessions, while AI giant Nvidia jumped 3.5 per cent after hitting an over two-month low on Tuesday.

Birkenstock advanced 6.3 per cent after the footwear maker beat market expectations for fourth-quarter results, while General Mills fell 2.5 per cent as the Cheerios maker slashed its annual profit forecast. – Additional reporting: agencies

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