Global stocks either side of the Atlantic surged following the “blue wave” of Democratic Party victories in the US midterm elections Thursday, as investors looked past political upheaval and promises of policy change to bet heavily on key drivers of economic growth.
Shares in Europe hit two-month highs, with its relations with the United States appearing to enter a new, more open era. Closer to home, nutrition group Glanbia grew its revenue and raised its guidance on earnings.
DUBLIN
The Iseq All-Share index rose 3.48 per cent to 14.852.83 by the close of markets. Glanbia led the charge, up 11.82 per cent to €22.04 a share after it announced a rise in revenue for the first nine months of the year, backed by strong consumer demand in protein and energy-based products. It also raised its guidance on full-year earnings per-share growth.
Bank of Ireland saw its share price jump 6.75 per cent to €19.45 a share, with rival AIB following behind, up 5.82 per cent to €11.55 a share by the end of trading hours after it raised forecasts for net interest income and customer loan growth.
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Ryanair was up 5.73 per cent to close at €25.27 a share, somehow still flying high after it announced a 15 per cent fall in profits on Monday, amounting to €2.15 billion, although the airline’s chief executive Michael O’Leary committed the company to expanding next year, with the possibility of higher air fares.
LONDON
The London Stock Exchange saw sizeable increases in share prices for household brand names, although losses in the energy sector pulled the city’s two leading indices closer towards neutral. The blue-chip FTSE 100 increased 1.83 per cent, while the mid-cap FTSE 250 grew 0.98 per cent.
Supermarket giant M & S jumped 6.40 per cent after the company’s midyear fiscal results showed a strong rebound in profitability. Meanwhile, Associated British Foods, a grocery group that also has Penneys/Primark in its portfolio, followed behind, up 6.37 per cent after it returned a 63p per share dividend to shareholders.
But oil and gas companies Ithaca and BP suffered declines, down 7.90 per cent and 3.00 per cent, respectively. A mix of political uncertainty in the US and falling oil prices from the Middle East led investors to rethink their stake in the energy market.
EUROPE
Elsewhere in Europe, shares across the Continent surged, driven by strong investor confidence in safe bets across the banking and motor sectors. The blue-chip Stoxx 50 index jumped 2.09 per cent to a two-month high, while the mid-cap Stoxx 600 followed slightly behind, up 1.91 per cent by close of markets.
Germany’s Deutsche Bank jumped 6.88 per cent and Spain’s Banco Santander was up 4.87 per cent, while France’s BNP Paribas followed along, increasing 4.67 per cent, as traders sought low-risk, high-return investments to calm their nerves against election jitters and the AI boom.
BMW was up 5.50 per cent, with Mercedes Benz increasing 4.56 per cent, following strong earnings reports published earlier in the day upgrading the companies’ investment guidance.
NEW YORK
Early trades on Wall Street saw stocks rise and the dollar drop following the Democratic Party’s sweeping electoral victories across Congress, gaining control of the House of Representatives and the Senate.
The major stock indices – The S&P 500, the Nasdaq 100 and the Dow Jones Industrial Average – all hovered around a 2 per cent increase before 11am New York Time.
Investors appeared willing to look past the political upheaval, betting the main drivers of US growth, from consumer spending to the artificial intelligence boom, would remain intact. Political gridlock could curb further fiscal expansion and ease pressure on bonds, offering support for stocks.
While Democratic gains could complicate data centre development in some states, many investors see little immediate threat to the broader artificial intelligence investment picture. – Additional reporting: Bloomberg.
