Business

Markets rise on rate cut hopes

Bank of England becomes latest to signal ease in borrowing charges

Video gamer Roblox shares fell as it cut forecasts on Thursday.

Barry O'Halloran
Thu May 9 2024 - 19:16

Markets rose on Thursday as further indications of summer interest rate cuts from the United States and UK buoyed investors.

Dublin

Falls in leading stocks and the banks left the Irish Stock Exchange trailing the rest of Europe on Thursday, dealers said.

Airline Ryanair fell 3.25 per cent to €18.76, although dealers noted there was no stock-specific news on the day.

The carrier lost ground during the week following reports of remarks by chief executive Michael O’Leary about air fares.

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Dealers pointed out that the shares regained that ground subsequently, but slipped again on Thursday.

Food group Glanbia was 1.14 per cent off at €18.20 while Kerry Group shed 1 per cent to €79.50.

AIB tumbled 4.4 per cent to €4.89 on Thursday, also with no news driving the decline in its value.

Dealers noted that Irish lenders gained ground recently following brokers’ comments that larger European banks could take them over.

AIB’s peer Bank of Ireland dropped 1.66 per cent to €9.824. Both under performed European lenders, which were collectively down around half a per cent on Thursday, traders pointed out.

Ferry company Irish Continental Group closed 0.37 per cent down at €5.38 despite reporting that revenues rose more than 8 per cent in the first four months of the year to €177 million.

London

The FTSE 100 outperformed European indexes as the Bank of England’s latest policy decision drove wagers on interest-rate cuts. The export-heavy blue-chip index was up 0.5 per cent at a record high by 12:07pm on Thursday.

Britain’s central bankers held rates steady but signalled a likely cut in the summer.

Heavyweight industrial metal miners led sectoral gains with a rise of 1.3 per cent, while precious metal miners were 0.9 per cent higher as metal prices rose following soft US jobs data that reinforced Federal Reserve rate cut bets.

Harbour Energy, the largest British North Sea oil and gas producer, was the biggest gainer on the FTSE 250, gaining 7.7 per cent to 301.10 pence sterling after it said it expects to generate significantly higher free cash flow next year.

Miner Anglo American was one of the best performers in its industry, climbing 3 per cent to 2,736p.

3i Group was the biggest faller on the FTSE 100, closing 5.2 per cent down at 2,883p after the multinational private equity and venture capital firm’s annual total return fell.

HSBC Holdings tumbled 4.15 per cent as it traded ex-dividend.

Europe

Europe’s Stoxx 600 Index, which tracks 600 stocks across 18 markets, gained for a fifth day to close 0.2 per cent higher, with miners outperforming while autos, as well as travel and leisure stocks, lagged the most.

Markets in Denmark, Finland, Norway, Sweden and Switzerland were closed for a holiday.

Banco de Sabadell gained 3.17 per cent to €1.86 after Banco Bilbao Vizcaya Argentaria commenced a hostile bid for the lender, days after an earlier approach was rejected by the smaller rival’s board. BBVA’s shares fell 6.71 per cent to €9.60.

Telefonica was muted, dipping 0.7 per cent to €4.16, after reporting first-quarter profit that matched analysts’ estimates and said it was on track to meet its guidance this year.

US

Wall Street’s main indexes rose on Thursday as weekly jobless claims data offered fresh hopes that the Federal Reserve will cut interest rates this year.

Arm Holdings dipped almost 2 per cent as its full-year revenue forecast came in below expectations. Bigger rival Nvidia slipped 0.9 per cent.

Roblox slumped 22 per cent after the video-gaming platform cut its annual bookings forecast, in a sign that people were dialling back spending amid an uncertain economic outlook and elevated levels of inflation. – Additional reporting: Bloomberg, Reuters

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas

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