European shares rose on Thursday as upbeat corporate earnings pushed French and German stocks to a record high, while investors assessed comments by European Central Bank (ECB) president Christine Lagarde on the disinflation process in the euro zone.
Investors drew positive inferences after Ms Lagarde told a European Parliament hearing in Brussels that recent economic data out of the euro zone indicated inflation was heading back to the target as predicted.
Dublin
The Iseq fell 0.6 per cent as the Dublin market was unable to join in the positive momentum across Europe. The index was pulled lower by a 4.5 per cent decline for major stock Kerry after it published financial results for 2023.
The food group closed at €78.30 after it said revenue fell 8.6 per cent last year as it was affected by currency exchange rate changes and its Irish dairy unit remained a drag on the business, while chief executive Edmond Scanlon said overall consumer market volumes remained “relatively muted” as it began 2024.
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Food group Glanbia fell 2.4 per cent to €15.80, while Ryanair finished fractionally in positive territory at €20.06. But there were gains for other stocks, with packaging group Smurfit Kappa edging up 0.6 per cent to €37.41 and insulation-maker Kingspan rising 2 per cent to €82.70.
London
The FTSE 100 gained 0.4 per cent as data showed the UK economy entered a recession in the second half of 2023, fuelling bets the Bank of England would ease its monetary policy. The mid-cap FTSE 250 index rose 0.5 per cent.
The UK economy entered a recession in the second half of 2023 after it shrank by a worse-than-expected 0.3 per cent in the three months to December. It also contracted by 0.1 per cent between July and September. However, shares were supported by a fall in the 10-year UK gilt yield.
Among single stocks Close Brothers Group sank 22.5 per cent as the lender said it would not pay dividends for the current financial year as there was “significant uncertainty” about a regulatory probe into the motor finance industry over commission arrangements.
Europe
The pan-European Stoxx 600 closed up 0.6 per cent at an over two-year high, with Goldman Sachs raising its 2024 target for the benchmark index to 510 points, representing about 5 per cent upside from current levels.
France’s benchmark Cac 40 closed up 0.9 per cent, near its intraday record high, with Renault the top gainer. The carmaker’s shares jumped 6.5 per cent after it reported margin and revenue gains and a huge dividend increase.
Also boosting the Cac 40 was a near 2 per cent gain in shares of Pernod Ricard as the spirits-maker left its longer-term growth ambitions intact.
Germany’s Dax both hit an intraday record high and ended up 0.6 per cent at a record closing high. Commerzbank was the top performer on the index, up 5.5 per cent as the lender posted its biggest profit in 15 years in 2023 thanks to a boost from higher interest rates.
US
The S&P 500 and the Dow gained in early trading as investors cheered a higher-than-expected fall in retail sales data and looked ahead for clues on when the US Federal Reserve would deliver its first interest rate cut this year. US retail sales dropped 0.8 per cent in January, a report showed.
Google’s parent company Alphabet dropped 2.8 per cent after investment firm Third Point dissolved its stake in the mega-cap stock. Apple slipped 0.9 per cent after Berkshire Hathaway trimmed its large stake in the iPhone-maker and Soros Fund Management dissolved its stake in the company.
Cisco Systems shed 2.5 per cent as it planned to cut 5 per cent of its global workforce and lowered its annual revenue target to navigate a tough economy.
Additional reporting: Reuters
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