European shares edged higher on Monday, with technology stocks leading gains following an upbeat close on Wall Street at the end of last week. However, trading activity remained somewhat subdued as UK market participants enjoyed a bank holiday.
The pan-European Stoxx 600 added 0.6 per cent after posting its first weekly gain in four.
Technology stocks advanced 1.1 per cent, their first climb in three sessions, tracking an overnight rally on Wall Street after US Federal Reserve chair Jerome Powell’s remarks at the Jackson Hole symposium on Friday.
“Jackson Hole has not altered our stance with regards to Fed policy; the data up till now warrants a pause in the next meeting and the market is growing comfortable with that narrative,” said Georgios Leontaris, chief investment officer for Switzerland and EMEA, HSBC Global Private Banking and Wealth.
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Dublin
The Iseq All Share index advanced 1.2 per cent to 8,884.61, albeit amid thin newsflow on companies listed on the Irish market.
Banking stocks generally moved higher, with Bank of Ireland gaining 1.4 per cent to €9.28, and AIB rising 0.4 per cent to €4.27, in line with the wider sector across Europe.
CRH gained 0.7 per cent to €52.90 as the building materials giant entered its fourth-last week on the Irish market as it takes on a primary listing in New York.
Housebuilders were mixed, with Cairn Homes dipping 0.8 per cent to €1.06, while Glenveagh Properties rose 2.4 per cent to 97.9c.
Europe
China-linked sectors such as automakers and industrials added 0.4 per cent and 0.7 per cent, respectively, after the country’s finance ministry said on Sunday it was reducing the 0.1 per cent duty on stock trades “to invigorate the capital market and boost investor confidence.”
“Overnight we had the halving of the stamping duty which is clearly a positive intervention but at the same time it does very little to lift the real economy,” HSBC’s Mr Leontaris said.
China-exposed luxury heavyweights LVMH, Kering and Hermes added around 0.7 per cent each.
Meanwhile, interest rate expectations in the euro zone remained tepid following the European Central Bank president Christine Lagarde’s speech late on Friday at the Jackson Hole symposium. Latvian policymaker Martins Kazaks said on Saturday it may be too early for the ECB to pause interest rate hikes now. Euro zone banks added 1.2 per cent.
A survey showed the mood among German exporters further clouded over in August, although there were signs of improvement in the beleaguered chemicals sector.
Bond yields across the euro zone edged higher after a slew of economic data this week, including jobs data in the United States and inflation data in France and Germany.
French finance minister Bruno Le Maire also voiced similar concerns, saying that he does not expect interest rates to go down in the months ahead.
Heading into the last days of the month the pan-European Stoxx 600 is set for its worst month so far this year as elevated bond yields and a worsening sentiment towards China kept a lid on gains.
New York
Wall Street’s main indexes were higher in early afternoon trading ahead of key inflation and jobs data this week that will offer more clues on the Federal Reserve’s interest rate path.
Focus now shifts to a report on the personal consumption expenditures price index, the Fed’s preferred inflation gauge, which is set to be released on Thursday and the non-farm payrolls data due on Friday.
“There’s some risk core inflation on a year-over-year basis is still at a level that’s untenable for members of the Fed ... there are some upside risks in terms of rates going into the September meeting,” said Roosevelt Bowman, senior investment strategist at Bernstein Private Wealth Management.
Alphabet and Meta Platforms inched upwards, while Amazon and Nvidia slipped.
3M jumped on a report that the conglomerate has tentatively agreed to pay more than $5.5 billion (€5.1bn) to resolve over 300,000 lawsuits claiming it sold the US military defective combat earplugs.
The US Federal Trade Commission suspended its challenge of Amgen’s $27.8 billion purchase of Horizon Therapeutics. Horizon’s shares rose
Goldman Sachs gained after the lender struck a deal to sell an investment advisory business to wealth management firm Creative Planning.
– Additional reporting, Reuters
