European shares boosted by strong earnings and reports of M&A

Iseq closes slightly higher with house builders Cairn and Glenveagh in focus

European shares closed higher for a third straight session on Wednesday as strong fourth-quarter earnings and deal-making possibilities outweighed concerns over interest rate hikes ahead of key central bank decisions due on Thursday.

DUBLIN

The Iseq closed in positive territory, up 0.3 per cent to 8,383.65.

House builders were in focus, with Cairn Homes up 3.4 per cent to €1.27 and Glenveagh 1.3 per cent higher at €1.26.

Financial stocks were also of interest, with AIB up 2.85 per cent to €2.45. Bank of Ireland was flat at €6.17.

There was lots of rebalancing taking place on Wednesday with stocks that had made major gains earlier in the week losing ground.

Among those to see share prices fall was hotels group Dalata, which was down 4.5 per cent to €4.06, and Origin, down 7 per cent to €3.81.

Other movers included CRH, which gained 1.5 per cent to €46.23 with 1.5 million shares traded.

Flutter, which had been up 3 per cent earlier in the day, closed down 0.7 per cent to €134.75.

LONDON

London’s Ftse 100 rose on Wednesday, led by miners and consumer staple stocks, while the banking sub-index rose in anticipation of a second consecutive rate hike from the Bank of England meeting on Thursday.

The blue-chip Ftse 100 index was up 0.6 per cent, extending gains for the second session, while the domestically focused mid-cap index rose 0.4 per cent with industrial stocks leading gains.

Among individual stocks, Ocado rose 5.7 per cent and was the top percentage gainer on the blue chip index after Credit Suisse double upgraded the online supermarket group.

Vodafone rose 3.4 per cent after the network provider said it was on track to meet its full-year guidance and posted a 2.7 per cent rise in third-quarter group service revenue.

EUROPE

The pan-European Stoxx 600 rose 0.5 per cent. French IT consultancy group Atos jumped more than 8 per cent, and was the top performer on the index after Reuters reported tech firm Thales was considering a bid for Atos's cybersecurity arm. Thales shares dropped 3 per cent.

Strong earnings continued to pour in. Swedish industrial technology group Hexagon gained 4.5 per cent, after beating market expectations with record quarterly earnings.

German chip supplier Siltronic posted a 17 per cent jump in quarterly earnings. But the stock fell 1.1 per cent after a sale to Taiwan's GlobalWafers collapsed.

Novo Nordisk rose 1 per cent despite missing expectations for fourth-quarter operating profit, as the Danish drug developer rejected allegations it had engaged in manoeuvres to hike the price of insulin in the US.

Swedbank dropped 5.3 per cent after posting a slightly weaker-than-expected operating profit due to weaker results from fixed income trading.

Switzerland's Julius Baer was the worst performer on the Stoxx 600, down 5.7 per cent as analysts flagged a miss on costs after the firm's earnings release.

WALL STREET

US shares were set to extend gains for the fourth straight session on Wednesday after a turbulent start to the year, as Google parent Alphabet and chip maker Advanced Micro Devices’ shares surged following strong quarterly results.

Alphabet rose 8.2 per cent after reporting record quarterly sales on Tuesday, and said it planned to undertake a 20-to-one stock split.

Facebook-parent Meta Platforms, which was set to report results late on Wednesday, rose 1 per cent, while Amazon, slated to report on Thursday, slipped 0.7 per cent.

Advanced Micro Devices climbed 5.7 per cent after the company on Tuesday forecast 2022 revenue above expectations, following strong quarterly demand for its semiconductors, despite global supply snags.

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist