Surging commodities lift European stocks

‘Boris bounce’ sees FTSE rise for second consecutive session after Tuesday’s crash

Rising crude oil and commodities prices generally helped lift mining and energy stocks in New York and Europe on Thursday.

London’s FTSE 100 posted another gain on Thursday after UK prime minister Boris Johnson announced plans to step down when a successor can be found. The “Boris bounce” also helped lifted the sterling against the euro and the US dollar.

Dublin

Traders in Dublin said despite some “erratic” moves Thursday was another “positive day” for leading Irish stocks, with the Iseq up almost 2 per cent.

Irish banks regained a lot of the momentum they lost in Wednesday’s session, with AIB’s share price gaining almost 9 per cent to €2.14 at closing bell after falling out of favour earlier in the week. Bank of Ireland’s shares recovered some lost momentum, closing up 4.5 per cent to €5.90.

Mining company Kenmare Resources gained 4.6 per cent after German bank Berenberg issued an upbeat broker note. Cardboard box-maker Smurfit Kappa had another positive outing, jumping nearly 4 per cent after adding more than 1 per cent in Wednesday session.

At the opposite end of the spectrum, Providence Resources shed just over 11 per cent in trading after what dealers called a “very strong move” upwards in recent weeks.

Paddy Power-owner Flutter Entertainment, meanwhile, lost 3 per cent. Traders say the gambling giant’s performance in the session was a read-through from London-listed Ladbrokes-owner Entain, which lowered its guidance for the rest of the year on Wednesday due to Britain’s cost-of-living squeeze,

London

London’s stock market bounce continued into a second day as investors eye up a potential tax boost following UK prime minister Boris Johnson’s decision to resign as Conservative Party leader. With the relatively frugal Rishi Sunak no longer chancellor of the exchequer, some are betting that Tory leadership candidates may seek support among party members and donors by pledging to cut corporate taxes. That could give domestic shares a much-needed lift.

The FTSE 250 rose as much as 1.5 per cent on Thursday as sterling advanced.

Mining stocks were among the biggest movers in London and across the board, with Anglo American up over 7 per cent and Glencore up 6.8 per cent. Shell and BP gained 3.3 per cent and 4.7 per cent respectively as crude oil futures rallied following several days of decline. After tumbling close to 30 per cent over the past month, Tullow Oil’s shares finished the day 5.8 per cent higher.

Shares in housebuilder Persimmon fell over 5 per cent after it a reported a 10 per cent drop in the number of homes built in the first half of the year due to rising costs.

Europe

Still basking in the glow of Wednesday’s unexpectedly positive German industrial data, European stocks continued their positive streak. Surging oil and metal prices also lifted commodity stocks, while a jump in banks boosted Italy’s main index 3.1 per cent, its biggest daily increase since mid-March.

The cross-Continent Stoxx 600 index added 2 per cent in Thursday’s session, a second consecutive gain following Tuesday’s 2 per cent loss. Germany’s DAX was up close to 2 per cent, as was the French CAC 40.

Among the biggest movers were car-maker Mercedes, which gained 6 per cent. Chipmakers STMicroelectronics, BE Semiconductors, ASM International and ASML Holding gained between 2.9 per cent and 4.6 per cent after Samsung Electronics posted its best April-June profit since 2018.

Shares of Chr Hansen slid 9.8 per cent to the bottom of Stoxx 600 after the Danish food ingredients maker reported disappointing quarterly results and narrowed its organic revenue growth target for the trading year.

New York

US stocks rose as recent economic data alleviated concerns that inflation was too hot to be tamed.

The S&P 500 climbed as much as 1.3 per cent, while the tech-heavy Nasdaq 100 also pushed higher. Investors have been whipsawed in the past two weeks between concern over runaway inflation and the fear of a US recession.

Shares of Twitter rose as much as 3.4 per cent as the social-media firm hosted an event to explain its policy on spam bots, a sticking point in Elon Musk’s takeover deal. Tesla shares jumped as much as 4.7 per cent.

– Additional reporting: Bloomberg/Reuters

Ian Curran

Ian Curran is a Business reporter with The Irish Times