European stocks climbed on Thursday thanks to hopes of a breakthrough in the US debt ceiling stand-off, with Germany’s blue-chip index hitting its highest level in more than a year.
The continentwide Stoxx 600 index closed 0.4 per cent higher, with automobiles and technology stocks leading the buying spree.
Germany’s blue-chip Dax rallied 1.3 per cent to its strongest since January 2022, while France’s Cac 40 jumped 0.6 per cent to an over two-week high and Italy’s FTSE MIB rose 0.1 per cent to a three-week peak.
A media report said House Speaker Kevin McCarthy is optimistic congressional negotiators could reach a deal to raise or suspend the debt ceiling in time to hold a House vote on it next week.
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“There’s a bit of a relief wave rippling around financial markets that there will be an agreement reached,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“The eventuality of a seismic shock to the financial system retreating considerably has supported stocks today.”
Dublin
Permanent TSB fell 2 per cent to €2.30 after the lender announced it would increase the interest rate it pays to customers using its deposit accounts, adding a quarter of a per cent to the current rates from June.
The rate rise follows the European Central Bank’s decision to raise interest rates again earlier this month, in a bid to combat inflation. Rival lenders AIB and Bank of Ireland rose 0.5 per cent and 0.3 per cent respectively.
Iseq heavyweight Ryanair traded down 0.9 per cent at €16.19 despite positive sentiment for the industry and upbeat news from rival EasyJet. Home builders Cairns and Glenveagh were both up 0.7 per cent while packaging giant Smurfit Kappa was up 0.65 per cent at €34.21.
Europe
The main European stocks benchmarks have been largely rangebound this month as investors weighed the risks of further monetary policy tightening by the European Central Bank (ECB) and of a US recession.
The ECB will have to keep raising interest rates to bring inflation back to its 2 per cent goal, though most of the tightening has already been done, the central bank’s vice-president Luis de Guindos noted
Among top performing stocks on Thursday, CTS Eventim advanced 5 per cent after the German ticketing company reported preliminary first-quarter EBITDA ahead of consensus.
Volkswagen climbed 3.2 per cent on the carmaker’s plans to overhaul its core brand to increase efficiency and returns.
Shares of Deutsche Bank edged 0.7 per cent higher, recouping early losses, after the lender agreed to pay $75 million (€69 million) to settle a lawsuit by women who say they were abused by the late financier Jeffrey Epstein, and accused the German bank of facilitating his sex trafficking.
London
British equities closed higher on Thursday as optimism grew around a nearing US debt ceiling deal, while a tumble in BT Group and Burberry limited gains on the FTSE 100.
Britain’s largest broadband and mobile provider BT Group skidded 5 per cent after the company said it will cut up to 55,000 jobs as it completes its fibre roll-out and adapts to new technologies such as AI.
“Telecoms appears to be awash with job cuts with Vodafone and BT reducing the size of their workforces,” said Victoria Scholar, head of investment at interactive investor.
“Both have been struggling with the pressures of inflation, most notably from energy.” Vodafone Group said on Tuesday it would cut 11,000 jobs globally over three years.
The blue-chip FTSE 100 rose 0.3 per cent, reflecting an upbeat mood in global markets on hopes that Washington is edging closer to a deal on the U.S. debt ceiling issue that would avert a default.
New York
The Nasdaq and the S&P 500 rose on Thursday as investors shifted into high-growth stocks amid optimism about a US debt ceiling deal being reached soon, while shares of Walmart gained on its strong annual forecast.
The benchmark S&P 500 index reversed declines by early afternoon trading on reports that top US congressional Republican Kevin McCarthy said the House could vote on reaching a deal to raise or suspend the debt ceiling as soon as next week.
Growth stocks led gains, with Nvidia, Apple and Microsoft rising between 1 per cent and 4.4 per cent.
“We’re simply seeing money kind of leaking back into the market a little bit at a time as people have more comfort with the situation,” said David Russell, vice-president of market intelligence at TradeStation.
“They’re seeing that AI is giving people a reason to get excited now, there’s simply money that has been wanting to come back, especially to semiconductors and technology stocks and now they’re getting a green light to do that.”
Netflix surged 9.9 per cent after saying its recently launched ad-supported tier reached nearly 5 million active users per month.
Chipmaker Micron Technology’s shares gained 5 per cent as it plans to invest up to 500 billion yen (€3.34 billion) in Japan for new chips over the next few years.
Shares of Walmart added 0.4 per cent after the retailer raised its annual sales and profit targets, benefiting from inflation-wary consumers trading down to cheaper groceries. – Additional reporting by Reuters
