Bank rally helps European shares higher

Iseq all-share index gained 0.55% on the day

News of the US Federal Reserve’s rate cut helped bank stocks on Thursday. Photograph: Mark Lennihan/AP Photo

News of the US Federal Reserve’s rate cut helped bank stocks on Thursday. Photograph: Mark Lennihan/AP Photo

 

Global stocks were pushed higher on Thursday, a day after the US Federal Reserve cut interest rates as expected and left the door open for further monetary intervention.

In the US, a Microsoft-led rally in technology shares also pushed indexes higher.

Dublin

The Iseq all-share index rose 0.55 per cent on Thursday, helped by a rally in bank stocks.

Bank of Ireland was the top gainer on the smaller Iseq 20 index on the day, up 5.27 per cent to €3.68. AIB got a 3.26 per cent boost to close at €2.60 while Permanent TSB rose 4.32 per cent to €1.16.

Among the losers was Ryanair, which held its annual general meeting on Thursday. The stock shed 0.14 per cent to close at €9.93, although it was quite volatile on the day.

Dalata Hotel Group was another big loser with substantial volume, losing 1.38 per cent to end down at €5.

CRH, meanwhile, had a busy day on the index and ultimately gained 1.27 per cent to close at €31.14.

London

The Ftse 100 index ended 0.6 per cent higher and the mid-cap Ftse 250 index rose 0.2 per cent, with the financial sector boosting both indexes.

Next tumbled nearly 6 per cent after a “disappointing” start to autumn trading that the retailer said was down to unusually warm weather in parts of Britain.

JD Sports dropped almost 3 per cent after the British competition regulator announced its intention to refer the retailer’s deal to buy Footasylum to a phase-two investigation.

Brokerage actions drove some blue-chip moves. The world’s second-largest mobile operator, Vodafone, advanced 2.7 per cent after HSBC hiked its price target.

Aer Lingus owner IAG gained 3.8 per cent after Morgan Stanley initiated coverage with an “overweight” rating, saying the hurdles the company faces have been more than priced in.

Midcap constituent IG Group jumped 10 per cent to a seven-month high as client numbers grew thanks to favourable market conditions in August.

Insurance services company Charles Taylor shot up 38 per cent to its highest level in three years, with the share price topping the 315 pence-a-share go-private deal it has agreed with a company backed by private equity firm Lovell Minnick Partners.

Europe

The pan-European Stoxx 600 index gained 0.61 per cent, lifted by Swiss watchmakers Swatch and Richemont, which rose after strong watch export data.

European steel stocks ArcelorMittal, Salzgitter, Voestalpine, SSAB, Outokumpu and Thyssenkrupp declined after United States Steel’s gloomy current-quarter earnings forecast.

European banking shares rose 1.8 per cent and the Swiss franc was poised for its biggest gain in a month after the Swiss National Bank declined to match the European Central Bank and the Fed in easing monetary policy.

Finnish engineering group Wärtsilä gained more than 1 per cent despite HSBC cutting its price target as a result of a profit warning on Wednesday.

New York

Shares of software giant Microsoft rose 2.2 per cent after the company unveiled a $40 billion stock buy-back plan, boosting the S&P 500 benchmark index and driving the broader technology sector up.

The S&P 500 was about 10 points shy of its record high as markets also turned optimistic about low-level trade talks between the United States and China.

Healthcare stocks rose and were the second-largest boost to the S&P 500 after US house of representatives speaker Nancy Pelosi released a proposal for drug pricing policy.

Shares of retailer Target edged higher after it announced a $5 billion share buy-back plan and a quarterly dividend.

Content delivery network provider Akamai Technologies was down after KeyBanc analysts downgraded the stock to “sector weight” from “over weight”.

Darden Restaurants slipped as the restaurant chain operator’s quarterly sales missed analysts’ estimates. – Additional reporting: Reuters