European shares make gains after US inflation data calm investors

European shares rose on Wednesday in a sharp reversal from earlier in the session with data showing a slower-than-expected rise in US inflation last month providing some relief to investors.

The inflation data prompted traders to cut their bets on aggressive interest rate hikes by the Federal Reserve in September.

Dublin

The Iseq index rose 2.1 per cent, outperforming the major European indices amid decent gains for some of its biggest stocks. Flutter Entertainment recovered Tuesday’s 2.6 per cent slide and then some, rising 6.4 per cent to €108.70 ahead of its earnings update on Friday. Smurfit Kappa climbed 5 per cent to €37.84, while index heavyweight Ryanair also had a good day, advancing 2 per cent to €12.64.

There were mixed fortunes for the banks, with Bank of Ireland closing off 0.9 per cent at €5.86, while AIB added 1.15 per cent to €2.29. But building materials group CRH rose 1.5 per cent to €38.24 and insulation makers Kingspan also shook off a moribund Tuesday session by rebounding 2.3 per cent to €62.86.

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London

Britain’s main equity indices closed higher, with the mid-cap index outpacing the blue-chips. The FTSE 100 edged up 0.3 per cent to close at a fresh two-month high, but strength in sterling and weakness in healthcare stocks weighed on the index, while the FTSE 250 rallied 1.9 per cent.

Insurer Aviva jumped 12.2 per cent after saying it planned to give more money back to shareholders as it posted a better-than-expected 14 per cent rise in first-half operating profit. Motor insurer Admiral gained 12.6 per cent after results.

Deliveroo rose 7.4 per cent after the food delivery company’s chief executive said the gross transaction value of its orders had picked up since the end of the second quarter. Mid-cap stock TP ICAP rallied 13.6 per cent after the inter-dealer broker reported stronger-than-expected half-year profits, while advertising and marketing company 4imprint group jumped 10.7 per cent to a record high after strong first-half performance.

Europe

The pan-European Stoxx 600 index climbed 0.9 per cent, closing its best session in nearly two weeks. In Frankfurt, the Dax advanced 1.2 per cent despite concerns that heatwaves and scant rainfall this summer have drained water levels on the Rhine, Germany’s commercial artery, disrupting shipping and pushing freight costs up more than fivefold.

Rate-sensitive tech stocks, which were among early decliners, ended 2.4 per cent higher. Other major gainers included miners, retailers and travel & leisure.

Wind turbine maker Vestas jumped 8.8 per cent, making it the best performer on the Stoxx 600 after it said it would sell its converters and control panels business to KK Wind Solutions.

Ahold Delhaize gained 7.6 per cent after the Dutch supermarket giant said it was postponing plans for an initial public offering of its non-food retailer, Bol.com, because of unfavourable market conditions.

New York

Wall Street’s main indices rose more than 1 per cent after the release of data showing a slower-than-expected rise in inflation in July prompted traders to cut their bets on another supersized rate hike by the Federal Reserve.

US consumer prices were unchanged in July due to a sharp drop in the cost of petrol, delivering the first notable sign of relief for weary Americans who have watched prices climb over the past two years. The CBOE Volatility index, Wall Street’s “fear gauge”, fell to its lowest level since April.

High-growth and mega-cap technology stocks gained as treasury yields fell sharply across the board. Apple, Alphabet and Amazon rose more than 2 per cent each.

Electric-vehicle maker Tesla gained 2.6 per cent after chief executive Elon Musk sold $6.9 billion worth of company shares. Meta Platforms added 6.2 per cent after the Facebook parent said on Tuesday that it had raised $10 billion in its first-ever bond offering. — Additional reporting: Reuters