European shares rebound from two-day rout

Carmakers and retail stocks on Friday led a rebound in European shares from a two-day rout that saw investors grapple with shifting expectations on US interest rate hikes, a political crisis in Italy and recession risks. But sluggish economic growth in China due to widespread Covid-19 lockdowns continued to weigh on sentiment.

Dublin

The Dublin market gained almost 1.2 per cent on Friday, ending the week at 6,299.

Banking stocks regained some of the ground they lost the previous day, triggered by Morgan Stanley and JPMorgan Chase reporting falls in profits and sounding cautious on economic headwinds ahead. AIB and Bank of Ireland both gained over the day, with the latter adding 0.5 per cent, while AIB added 1.76 per cent to close at €2.086. The outlier was Permanent TSB, which lost almost 1.7 per cent to close at €1.18.

Ryanair shares added almost 1 per cent to close the week at €12.16, while hotel group Dalata ended at €3.445, adding 2.38 per cent, building on the previous day’s momentum.

Building materials giant CRH gained almost 1 per cent to €34.12, while insulation specialist Kingspan added 3.73 per cent to €54.

London

The FTSE 100 added 1.7 per cent, supported by energy giant Shell, AstraZeneca and British American Tobacco. The domestically focused FTSE 250 index gained 1.9 per cent.

China’s lockdowns took a toll on London’s luxury brand Burberry, whose first-quarter comparable store sales rose just by 1 per cent. The weakness in China pushed its shares 3.8 per cent lower.

BT Group fell 7.7 per cent to the bottom of FTSE 100 index, after media reports that peer Virgin Media O2 is in talks to buy broadband rival TalkTalk.

Tonic maker Fevertree fell 27.7 per cent after it lowered its annual profit forecast, citing worsening cost pressures and logistical issues.

Aston Martin’s shares surged 23.7 per cent after the luxury carmaker brought Saudi Arabia’s sovereign wealth fund as its second-largest shareholder and said it was looking to raise £653 million.

Europe

The continent-wide Stoxx 600 index ended 1.8 per cent higher after falling 2.6 per cent in the last two sessions on worries that the US Federal Reserve may hike interest rates by a bigger-than-expected 100 basis points later this month.

The Stoxx 600 fell 0.8 per cent this week against the backdrop of fears of an energy supply crunch due to the Russia-Ukraine war.

Volkswagen gained 3.5 per cent after its China unit stuck to a goal of doubling sales of its ID series of electric vehicles this year despite Covid-19 disruptions.

Shares of other automakers Mercedes-Benz, Porsche Automobil and Renault climbed between 4.3 per cent and 6.9 per cent.

Richemont and Burberry fell 2.9 per cent and 3.8 per cent after the luxury retailers laid bare the damage to sales inflicted by China’s strict lockdowns, renewing concerns about the outlook for the world’s top luxury goods market.

New York

The benchmark S&P 500 and the blue-chip Dow rose after a five-day run of losses, which were mostly fanned by worries of a 100 basis points rate hike at the July policy meeting following hot inflation data.

Citigroup jumped 8.5 per cent as strong trading activity in the second quarter helped offset a slump in investment banking. Wells Fargo gained 6 per cent even as it set aside more money to cover potential loan losses.

BlackRock edged up 0.1 per cent despite posting a bigger-than-expected quarterly profit drop.

UnitedHealth Group rose 4.1 per cent after raising its full-year profit forecast for a second straight quarter, as strong sales at its Optum unit helped it top quarterly results.

Shares of Pinterest rallied 13.2 per cent following a news report that activist investor Elliott Management has taken a more than 9 per cent stake in the social-media company, citing people familiar with the matter. – Additional reporting: Reuters