European shares hit three-week high on earnings boost

European shares rose on Thursday, boosted by AstraZeneca and Adyen on strong earnings, while markets awaited the Federal Reserve chair Jerome Powell’s remarks on the monetary policy outlook after European Central Bank officials played down market bets around rate cuts.

The pan-European Stoxx 600 closed 0.8 per cent higher at its highest level since October 18th.

ECB policymakers on Wednesday said further progress is needed to tame inflation, while vice president Luis de Guindos in an interview on Thursday said it is premature to discuss rate cuts amid lingering risks to the inflation outlook.

Bank of England Chief Economist Huw Pill also noted the central bank needed to maintain a restrictive stance for monetary policy, a day after governor Andrew Bailey pushed back against discussions on rate cuts.

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Dublin

Paddy Power Betfair owner Flutter had the most dramatic fluctuation on the Dublin market on Thursday, dropping 10.6 per cent to its lowest level since January after the company said it expects full-year earnings to be at the bottom of its previously forecast range, steering a 2 per cent slide in the travel and leisure sector. Flutter is planning to exit the Irish Stock Exchange in early 2024 as it adds a New York listing. The group will remain on the London Stock Exchange.

AIB and Bank of Ireland were marginally up on the day, by 0.6 and 0.2 per cent, as financials digested the various outlooks for interest rates. Insulation maker Kingspan reversed losses from the previous session, rising 1.3 per cent to €65.78. The company suffered a sharp decline in value earlier this week on the back of a weaker sales outlook.

Europe

Earnings continued to drive strong share movements.

Adyen surged 37.8 per cent to top the Stoxx 600 after the digital payments processor posted “better-than-feared” third-quarter sales with “more realistic” midterm targets.

Schneider Electric jumped 8.3 per cent after its medium and long-term outlook announcement, while German consumer goods company Henkel rose 4.5 per cent after slightly raising its full-year guidance.

Meanwhile, Novo Nordisk fell 2.8 per cent after regulators gave a thumbs up to Eli Lilly’s weight-loss treatment Zepbound, paving the way for a powerful new rival to the Danish drugmaker’s Wegovy. Coloplast slid 6.9 per cent after the Danish medical equipment maker reported fourth-quarter sales below expectations.

London

London-listed stocks reversed early losses and closed up on Thursday as investors parsed corporate earnings, with healthcare giant AstraZeneca the biggest boost to the benchmark index after bumping up its annual profit forecast.

The multinational-heavy FTSE 100 ended 0.7 per cent higher.

AstraZeneca added 2.6 per cent as the drugmaker lifted its annual core profit forecast, buoyed by strong demand for its cancer drugs, and moved to boost its pipeline in the booming anti-obesity market with a deal costing up to $2 billion (€1.9 billion).

Also aiding gains, Unilever advanced 2.1 per cent after brokerage Barclays upgraded its rating on the consumer staples firm to “overweight”. Auto Trader topped FTSE 100 gainers, jumping 8.5 per cent as the online car marketplace forecast annual profit margins to increase from a year ago.

New York

US stocks struggled for direction on Thursday as investors awaited further policy cues from central bank officials, including Federal Reserve chair Jerome Powell, as well as a raft of economic data next week.

Softer-than-expected monthly jobs data and the easing of the Fed’s hawkish stance at its last meeting pulled US Treasury yields down from multiyear highs, helping equities stage a stellar comeback from their October lows.

The S&P 500 index eked out marginal gains on Wednesday but managed to extend its winning streak to the eighth session.

If the benchmark index ends higher on Thursday, it will post its longest streak of gains since 2004.

Among major movers, Nvidia shares rose 2.9 per cent as local media reported the chip designer is planning to release three new chips for China. Tesla fell 4 per cent as HSBC initiated coverage of the EV maker with a “reduce” rating.

Walt Disney advanced 7.3 per cent on a quarterly profit beat and as Hollywood actors reached a tentative agreement with major studios. – Additional reporting: Reuters