European shares gained on Thursday, buoyed by strong earnings in cyclical sectors such as financials and industrials, while investors assessed the possible impact from escalating tensions in the Middle East and from uncertainty over US interest rates.
The pan-European Stoxx 600 rose 0.8 per cent at close to 649.95, briefly hitting its highest level since July 7th.
Banks were among the biggest boosts to the index, up 2.6 per cent, largely lifted by Spanish lender BBVA’s about 5 per cent gain after its second-quarter net profit rose more than 11 per cent on an annual basis. Spain’s bank-heavy index gained 1.8 per cent, mostly among regional peers.
Dublin
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PTSB shares fell by 2 per cent to €2.92 after the lender secured backing from 91.3 per cent of shareholders for its takeover by Austria’s Bawag at an extraordinary general meeting (egm) on Thursday. Uncertainty remains nevertheless over whether a separate count of minority shareholders will be required to approve the deal after the Government’s majority stake drove the overall result – 36 per cent of minority investors voted against the transaction at the egm.
It was a mixed day for the bank’s main Irish rivals AIB and Bank of Ireland, who fell by 3 per cent and rose by 1 per cent respectively. Ryanair also enjoyed a near 3 per cent bounce to €25.10 as oil prices fell marginally and European holidaymakers continued to travel despite the wildfires.
Europe
Construction and materials stocks gained 2.2 per cent. Bouygues shares rose 7.1 per cent after the French conglomerate reported a half-year core profit well ahead of market expectations.
Ortega added that if earnings growth could continue to broaden across sectors, investors will likely keep increasing their exposure to Europe.
Among others, Adidas tumbled 11.5 per cent, despite raising its annual sales forecast.
L’Oreal rose 2.7 per cent after the Paris-based cosmetics group reported better-than-expected second-quarter sales, while Stellantis lost 4.3 per cent after operating income missed analysts’ expectations in the second quarter.
London
London’s FTSE 100 closed slightly lower on Thursday after the Bank of England decided to keep interest rates on hold and mixed earnings reports weighed on the blue-chip index.
The FTSE 100 index closed down 0.1 per cent at 10,897 points, pulling back from an intraday record high earlier in the session. The UK midcap FTSE 250 rose 0.3 per cent.
The Bank of England kept interest rates on hold as it waits to see how the Iran war affects inflation pressures, although the renewal of hostilities prompted a third policymaker to back a rate hike.
Aerospace and defence firms were the top sectoral gainers following a 6 per cent boost to Rolls-Royce shares after the engineering company raised its full-year outlook far beyond market expectations.
Paper and packaging firm Mondi surged 10.9 per cent, its sharpest one-day jump since August 2022 after first-half results which powered the FTSE 350 General Industrials sector to its highest level since March 2025.
New York
US stocks gained in mid-session on Thursday as Microsoft’s stellar forecasts soothed concerns about massive artificial intelligence (AI) spending by companies, while investors also parsed fresh GDP and inflation data a day after the Federal Reserve’s rate decision.
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Microsoft jumped around 14 per cent after the company forecast current-quarter sales and cloud growth above expectations, capital expenditure below estimates and said it expects to keep generating cash through its fiscal 2027 that just began.
Investors have been spooked by rising AI costs at big technology firms even as they report strong earnings. Negative cash-flow reports from Alphabet and Tesla last week sparked a bout of selling in AI-linked stocks, with chip stocks also coming under pressure as investors questioned high valuations. The tech-heavy Nasdaq-100 dropped 10 per cent from its early June peak on Wednesday.
In a sign that AI concerns were far from over, Meta Platforms shed 9 per cent, as the social media giant reported a 91 per cent drop in second-quarter free cash flow, underscoring the financial strain of its costly AI buildout.
Apple and Amazon are scheduled to report earnings after the bell. Amazon was up 4.4 per cent, while Apple was down 2 per cent.
On the data front, US economic growth slowed in the second quarter amid a widening in the trade deficit, increasing at a 1.5 per cent rate versus estimates of 2.1 per cent growth. A separate reading also showed US inflation slowed in June.
“As Fed Chair [Kevin] Warsh stated yesterday, though, one month of good inflation data is not good enough when it comes to resting easy about inflation,” said Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research. – Additional reporting: Bloomberg/Reuters
