European shares edged up from the previous session’s three-month low on Wednesday as a pause in the oil price rally lifted risk appetite in advance of the Federal Reserve’s policy decision, with the US Central Bank widely expected to deliver its first rate hike since 2023.
The pan-European Stoxx 600 rose 0.5 per cent to 637.09 points, with big regional indexes also gaining. “While it is reasonable for the Fed to take a wait-and-see approach before hiking rates, it has been talking tough on inflation. If it does not act, its credibility could take a hit,” said Kathleen Brooks, research director at XTB.
“Warsh has backed himself into a corner on rates, in our view,” she added.
Dublin
The Iseq closed the day in positive territory, up 1.49 per cent. Like other travel stocks in Europe, Ryanair was buoyed by a dip in oil prices. Shares in the budget airline rose by 1.5 per cent to €22.32.
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Home builders Glenveagh and Cairn were both up 2 per cent as headline house price inflation slowed and in the wake of the Central Bank revising down it home completion projections for the next three years.
The global share rally also benefited Bank of Ireland and AIB, which ended the session, up 2.5 per cent and 3 per cent respectively.
Europe
Energy shares were the Stoxx 600’s biggest decliners, while the travel and leisure sector gained 1.2 per cent as the prospect of lower fuel costs offered some support.
Bond yields also eased from multi-month highs. Short-dated British government bond yields were on track for their largest one-day fall since May 20th, declining more sharply than those elsewhere.
European banking stocks rose 0.5 per cent, recovering some of Tuesday’s losses.
Chip-materials maker Soitec was the biggest gainer on the Stoxx 600, with a 13.4 per cent rise, after JPMorgan upgraded the company’s stock to “overweight” from “neutral”.
Pan African Resources gained 5.5 per cent after the miner said its full-year revenue more than doubled.
London
British stocks rose on Wednesday as housing and construction shares rallied on the back of strong results from Barratt Redrow and a sharp retreat in gilt yields, while investors awaited the US Federal Reserve’s interest rate decision.
The blue-chip FTSE 100 index rose 0.3 per cent to 10,688 points. Britain’s biggest home builder Barratt Redrow jumped nearly 12 per cent, its biggest percentage gain in nearly six years, after the company reported an improving reservation rate, a strong order book and a forecast-beating profit.
Short-dated British government bond yields headed for their biggest one-day drop since May 20th, falling more sharply than elsewhere and reversing some of this month’s rise caused by the escalation of the conflict in the Gulf.
Among mid-caps, greeting card retailer Moonpig dipped 1.2 per cent despite maintaining its annual outlook, with analysts pointing to consumer spending concerns and profit-taking.
New York
The Nasdaq Composite and the S&P 500 rose following a two-day slide, helped by a retreat in oil prices as investors held their breath for the Federal Reserve’s interest rate decision on Wednesday.
Technology shares and chipmakers rose, while energy and financials were lower. Nvidia gained nearly 2 per cent and was the top gainer on the Philadelphia SE Semiconductor Index.
The S&P 500 energy index was the worst-performing sector index, down 2.3 per cent, with Exxon Mobil and Chevron falling more than 2 per cent each.
The technology and industrials indexes led gains and were up 0.9 per cent each. Meta and Tesla rose 1.1 per cent and 1.6 pr cent, respectively.
Intel jumped 5.6 per cent after a report said South Korea’s SK Hynix was in talks with the company about memory chip manufacturing in the US for the first time. US-listed shares of SK Hynix were up 2.5 per cent. – Additional reporting by Reuters
