Stocks rally and investor anxiety eases after lower than expected US inflation data

European shares clocked an 11-week closing high on Thursday, as a slower-than-expected rise in US consumer prices strengthened hopes of less aggressive interest rate hikes from the Federal Reserve going ahead.

Europe’s technology and real estate sectors skyrocketed 7.6 per cent and 6.4 per cent respectively, marking their best day in over two years.

Dublin

The Irish index joined in the global rally, swelling 3.4 per cent with several stocks recovering some ground after recent slides. Flutter Entertainment, which dropped 3.7 per cent in the previous session, added 2.7 per cent to close at €133.95, while Smurfit Kappa, another faller on Wednesday, bounced back with a 6.3 per cent gain, with the packaging group’s share price finishing at €35.91.

Ryanair advanced 2.2 per cent to €13.24, insulation-maker Kingspan soared 7.8 per cent to €59.68, and building materials group CRH closed 4.6 per cent higher at €37.84.

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Food group Glanbia was among the few fallers, easing back 0.7 per cent to €10.90, while AIB slipped 0.3 per cent to €3.05 and Bank of Ireland shed 1.1 per cent to €7.31.

London

The UK’s main stock indexes closed at near two-month highs, with the FTSE 100 rising 1.1 per cent, although a rally in the pound checked further gains in the exporter-heavy blue-chip index. The domestically focused mid-cap FTSE 250 index jumped 3.9 per cent to post its biggest percentage gain in eight months.

A survey on Thursday showed British house prices fell for the first time in 28 months in October and rising mortgage costs threatened to put further pressure on the property market.

Among single stocks, AstraZeneca rose 2.9 per cent after the drugmaker raised its full-year adjusted earnings forecast on a boost from sales of its roster of cancer drugs.

Power company Centrica climbed 7.4 per cent after it forecast its annual adjusted earnings per share outlook to be at the top end of analysts’ expectations, and announced a share buyback of up to 5 per cent of its share capital.

WH Smith added 5.1 per cent after the company, which sells everything from books and sandwiches to Bluetooth headphones, reinstated dividends and posted an annual profit.

Europe

The pan-European Stoxx 600 jumped 2.8 per cent, notching its biggest percentage gain in five weeks. All the sectors barring energy closed sharply higher, with rate-sensitive stocks at the forefront of the buying spree.

The Euro Stoxx volatility index slid to a 12-week low of 21.31 points, reflecting easing anxiety among investors.

The Stoxx 600 index is now on track for its fourth straight week of gains, as hopes of a less aggressive stance by the US central bank in its fight against inflation and a better-than-expected earnings season offset worries of a recession in Europe.

Allianz gained 5.9 per cent as the German insurer gave a more optimistic full-year outlook after reporting a better-than-expected 17 per cent rise in third-quarter net profit.

Germany’s Delivery Hero surged 18.6 per cent, to top the Stoxx 600, after it reassured investors about achieving an adjusted core profit margin in 2023 and upgraded its outlook for this year.

US

Wall Street stocks surged, the dollar slid and Treasury yields dropped as cooler-than-expected inflation data for October suggested the Federal Reserve’s barrage of interest rate hikes are beginning to have their intended effect.

All three major US stock indexes rebounded sharply on the heels of Wednesday’s sell-off, and the benchmark Treasury yield touched its lowest level in weeks.

Amazon.com gained as much as 15 per cent during the session at the news that chief executive Andy Jassy has embarked on a review of expenses, as part of broader efforts to streamline the world’s largest e-commerce company.

Amazon shares rose as high as $98.69, marking their largest intraday gain since February. – Additional reporting: Reuters/Bloomberg