European stocks rally after sell-off sends equities tumbling

European stocks rebounded from a sell-off that sent equities to almost six-week lows, with gains accelerating in the final hour of trading.

Equities were boosted by a rise in the shares of the UK companies more reliant on overseas revenue, as the pound weakened after Bank of England officials indicated that another interest rate cut might be on the cards this year.

Investors also awaited further cues from economic releases and next week's Federal Reserve rate decision. "Markets are at the mercy of central banks," Thomas Thygesen, head of cross-asset strategy at Copenhagen-based SEB, told Bloomberg.

The chances of a Fed rate increase were perceived to fade after mixed signals about the health of the US economy.

DUBLIN

There was little change on the Iseq, which closed up 0.4 per cent. CRH rose 1 per cent to €29.58, after a US peer in the market for building materials, Apogee Enterprises, reported better-than-expected results and a brighter outlook overnight.

Insulation-maker Kingspan rose 2 per cent to €24.70, while Dalata Hotel Group added to the previous day's gains by adding 3.8 per cent to finish the session at €4.10.

Food groups Kerry and Glanbia were up 0.8-0.9 per cent at €73.90 and €16.64 respectively, while Origin Enterprises added almost 5 per cent to 5.56.

Ryanair closed flat at €13.04, and paper and packaging group Smurfit Kappa closed at €21.92, up 0.4 per cent.

LONDON

The FTSE 100 climbed 0.9 per cent, outperforming other western European benchmarks, with most of the gains coming in a rally after the Bank of England’s update on future interest rate policy.

Guinness owner Diageo, international bank HSBC Holdings and British American Tobacco all climbed at least 1.3 per cent, as stocks that earn a high share of their revenues in non-sterling markets rose in trading.

WM Morrison Supermarkets jumped 7.5 per cent after the company reported sales and earnings that beat analysts’ estimates. Sector rivals Tesco and Sainsbury were also among the top performers, up 4.9 per cent and 2.1 per cent respectively.

Clothing retailer Next slid 4.9 per cent after saying the current quarter will be its toughest this year and Brexit-induced price increases will hurt 2017 sales.

It reported a drop in first-half profit of almost 1.5 per cent, with the results also putting pressure on Marks & Spencer, which fell 2.6 per cent.

Coca-Cola HBC rallied, its shares hitting their highest level since January 2014 on an upgrade from Credit Suisse to “outperform” from “neutral”.

EUROPE

The Stoxx Europe 600 Index extended its advance in the final hour of trading, finishing up 0.6 per cent, as European equities responded to the Bank of England comments and also took their cue from rising US equities.

Siemens climbed 3 per cent after its chief executive officer said the engineering firm may beat its earnings forecast for the year ending this month.

Moncler added 3.9 per cent on a report that China’s Fosun International has had an interest in investing in the Italian maker of luxury skiwear.

Hennes and Mauritz declined 4.3 per cent after the Swedish fashion retailer said August sales were hurt by hot weather.

Italian leather goods company Tod’s slipped 6 per cent after analysts at Raymond James Financial cut its estimate on second-half sales growth, saying the shoemaker mentioned no change in momentum after a decline in the earlier period.

NEW YORK

Stocks on Wall Street gained after a mixed set of US economic data releases were perceived to reduce the chances of the Federal Reserve announcing an interest rate increase next week.

Reports showed retail sales and industrial production fell more than forecast in August, while the number of applications for unemployment benefits barely rose last week.

Apple rose 2.9 per cent, rising for the fourth straight day and touching a nine-month high, after the company said its first batch of iPhone 7 Plus sold out globally.

Skyworks Solutions, which supplies chips to Apple, was the top percentage gainer on the S&P with a 6 per cent jump. The financials index gained the least, up 0.6 per cent, on lower prospects of a rate increase.

– (Additional reporting: Bloomberg / Reuters.)