Business

Global markets rally as central bankers hold steady on rates

There were no further interest rate hikes announced in updates from the European Central Bank and Bank of England on Thursday

Markets were buoyed by the apparent pivot by Federal Reserve chairman Jay Powell to looser monetary policy and as expected rate decisions by the ECB and Bank of England. Photograph: EPA

Ellen O’Regan
Thu Dec 14 2023 - 18:26

It was a strong day of trading across global markets on Thursday, as the European Central Bank and Bank of England both announced that they were holding interest rates steady for now, following a similar announcement by the US Federal Reserve on Wednesday.

Gains for Euronext Dublin reflected similar upward trajectories across other European and US markets.

Dublin

The ISEQ All Share Index gained 1.25 per cent on Thursday, to close at 8,562.6.

It was a weak day for the Irish banks, as AIB fell by 4.77 per cent to €3.63, Bank of Ireland lost 0.54 per cent to close at €8.16 and Permanent TSB was down 0.95 per cent to €1.57.

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Home builders Cairn Homes and Glenveagh Properties both rose on the day. Cairn gained 1.31 per cent to €1.24, while Glenveagh rose by 2.81 per cent to close at €1.17.

Meanwhile, building materials company Kingspan rose by 7.76 per cent to €79.70.

Paddy Power parent company Flutter Entertainment gained 2.08 per cent, to €154.30, while budget airline Ryanair was up 0.51 per cent by the end of the day, closing at €18.71.

Also gaining on the day, packaging company Smurfit Kappa rose by 4.96 per cent to €36.38.

Food company Glanbia fell by 2.13 per cent to €15.59, while peer Kerry Group little changed.

London

The export-heavy FTSE 100 Index rose by 1.33 per cent on Thursday to 7,648.98, while the FTSE Mid-Cap 250 Index rose by 3 per cent to close at 19,256.96.

The Bank of England announced on Thursday that while it was not raising rates above the current 15-year high, it indicated that rates would remain high “for an extended period”.

Among individual stocks, Currys rose 11.53 per cent after the electricals retailer stuck to its annual financial forecast and said its balance sheet and liquidity had strengthened.

Software and robotics platform Ocado was the top FTSE 100 gainer, rising 11.62 per cent and hitting a 12-week high.

Europe

The pan-European Stoxx 600 Index rose by 0.87 per cent on Thursday, to close at 476.58. Meanwhile, the French CAC 40 Index rose by 0.59 per cent to 7,575.85 and the German DAX Index fell by 0.08 per cent to 16,752.23.

The European Central Bank (ECB) also maintained interest rates at their highest-ever level on Thursday but pushed back against the notion of rate cuts.

Elsewhere, the Swiss National Bank held rates firm but lowered inflation forecasts, while Norway’s central bank surprised with a rate hike.

Among individual movers, Vivendi 9.96 per cent after the French company said it is considering splitting up its media and entertainment empire into several companies to better take advantage of each unit’s strength.

AMS Osram jumped 13.45 per cent after Jefferies upgraded the Swiss sensor maker to “buy” from “hold”.

Italian luxury group Brunello Cucinelli gained 6.86 per cent after raising its 2023 revenue growth forecast again.

MorphoSys shed 3.98 per cent after the German biotech firm launched a 10 per cent cash capital increase.

New York

Wall Street’s main indexes rose on Thursday, with tech giant Apple notching up a record high, a day after the Federal Reserve held interest rates at the highest rate in 22 years, but signalled that borrowing costs would be lower next year.

Federal Reserve chair Jerome Powell said the historic tightening of monetary policy was likely over, as inflation falls faster than expected and discussions on cuts in borrowing costs are coming “into view”.

Apple shares rose early in the day surpassing a previous July peak, while Adobe shares fell after the Photoshop maker forecast annual and quarterly revenue below estimates.

Moderna jumped after an experimental messenger RNA cancer vaccine it co-developed with Merck cut the chance of recurrence or death from melanoma by half after three years, when paired with Merck’s Keytruda drug.

Occidental Petroleum saw gains after Warren Buffett’s Berkshire Hathaway acquired nearly 10.5 million shares of the oil giant for about $588.7 million (€535.4 million).

Foot Locker rose after Piper Sandler upgraded the sportswear retailer to “overweight” from “neutral”. - Additional reporting from Reuters.

Ellen O'Regan

Ellen O’Regan

Ellen O’Regan is an Irish Times journalist.

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