Shares climb as traders bet on slower interest rate hikes

US and European shares rose on Monday as signs of a cooling US economy raised hopes that the Federal Reserve will slow its pace of rate hikes.

Dublin

The Iseq Overall Index got off to a good start this week, adding almost 1.6 per cent over the day to close at 6,731.

The market was buoyed by gains in bellwether stock CRH, which added 1.7 per cent during the day to close at €34.63, and Kerry Group, which gained 2 per cent over the session. Food group Glanbia was 1.5 per cent up on the day, hitting €11.54.

Packaging giant Smurfit Kappa saw its stock close at €32.76, a gain of more than 2.5 per cent, while hotel group Dalata recovered some of its losses last week to finish the day 2.8 per cent higher.

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While banking stocks AIB and Bank of Ireland gained half a per cent and 1.16 per cent respectively, Permanent TSB fared less well, dipping into the red and shedding 3.6 per cent.

London

London’s markets had a resilient showing on Monday as traders broadly welcomed the announcement that Rishi Sunak is set to be the next UK prime minister.

It came amid a broad improvement in sentiment across global markets, which have been boosted by waning calls for lofty interest hikes. The FTSE 100 ended the day up 44.26 points, or 0.64 per cent, at 7,013.99.

Shares in education publisher Pearson made gains after it recorded a jump in sales and confirmed it is on track to shave off £100 million in costs by 2023.

The FTSE 100-listed firm said sales growth was being driven by a post-pandemic resurgence in English-language learning and normalisation of exam timetables.

Shares in Pearson rose by 77.6p to 965p at the close of play.

Auto Trader saw shares improve on Monday after the vehicle marketplace firm offloaded its Irish subsidiary Webzone. Auto Trader confirmed the sale of Webzone, which runs the Carzone brand, for about €30 million to Mediahuis Ireland.

Shares in the London-listed business moved 15.8p higher to 502p.

Europe

European shares rose on Monday, driven by hopes that the Federal Reserve could slow its pace of interest rate hikes, while investors braced for a busy week of earnings and key interest rate decision from the European Central Bank.

The continent-wide Stoxx 600 index rose 1.14 per cent, while the German Dax improved 1.65 per cent by the end of the session and the French Cac finished 1.7 per cent higher.

The European Central Bank meets this week and is widely expected to raise rates by 75 basis points.

New York

US stock indexes climbed on Monday as shrinking business activity lifted hopes of a less aggressive approach by the Federal Reserve, even though the gains on the Nasdaq were capped by a slump in Tesla and some Chinese firms.

In the latest evidence of an economy softening in the face of high inflation and rising interest rates, a survey showed manufacturers and service firms reporting weaker client demand in October.

Wall Street’s main indexes had rallied on Friday after a report said the Fed would likely debate a smaller interest rate hike in December and comments from policymakers indicated the central bank was weighing how higher it could push the borrowing costs.

Meanwhile, Tesla dropped 4.3 per cent after it cut starter prices for its Model 3 and Model Y cars by as much as 9 per cent in China, indicating signs of softening demand in the world’s largest auto market.

US-listed shares of Chinese companies such as Pinduoduo, JD.com and Baidu fell between 14 per cent and 27 per cent as President Xi Jinping secured a precedent-breaking third leadership term and introduced the new politburo standing committee stacked with loyalists. — Additional reporting: Reuters, PA