European shares rise after Federal Reserve signal on interest rates

Diageo gains on strong results, while Tesla drops

Tesla’s stock sank after its warning that semiconductor shortages will continue. Photograph: David Paul Morris/Bloomberg

Tesla’s stock sank after its warning that semiconductor shortages will continue. Photograph: David Paul Morris/Bloomberg

 

European shares shrugged off a weak start to the trading session to end higher on Thursday after the US Federal Reserve signalled a March interest rate hike, with defensive sectors including healthcare and utilities leading the gains.

Equity markets were battered earlier in the day after the central bank also reaffirmed plans to end its bond purchases that month.

DUBLIN

The Iseq rose 0.3 per cent, boosted by gains for key stocks. Bank of Ireland joined in the upward momentum for lenders, climbing 1.5 per cent to €5.80, though AIB nudged down 0.1 per cent to €2.35.

Food groups Glanbia and Kerry both rose as defensive stocks were in vogue with investors, with Glanbia closing 1.1 per cent higher at €12.18 and Kerry up 0.5 per cent at €111.00.

Packaging company Smurfit Kappa also added 0.5 per cent to €46.22, while Ryanair edged up 0.1 per cent to €16.54. It was a good session too for Dalata Hotel Group, which gained 3.1 per cent to finish just below €4.17.

But Glenveagh Properties fell 1.4 per cent to €1.16 and insulation maker Kingspan declined 1.4 per cent to €82.30. Cairn Homes was down 2.8 per cent at €1.24.

LONDON

The FTSE 100 rose 1.1 per cent on Thursday following strong results from drinks giant Diageo and as bank stocks benefited from rising yields. The FTSE 250 finished down 0.1 per cent.

Banks were among the top boosts to the blue-chip index, tracking stronger yields after the signal from the Fed, while investors priced in another interest rate increase by the Bank of England next week.

Guinness maker Diageo was among the top players on the index, rising 2.5 per cent after it posted a large jump in half-year sales.

Dr Martens plunged 9 per cent to a record low after the boots maker’s revenue growth slowed, while security and cleaning services provider Mitie Group rose 7.2 per cent after it raised its annual profit outlook again.

Greencore added 1.4 per cent after it reported a quarterly jump in revenues. A resolution on the food group’s plan to pay out executive bonuses was passed at its annual general meeting.

EUROPE

The pan-European Stoxx 600 rose 0.7 per cent, with most major regional markets reversing course to end the day higher. Healthcare, telecommunications and utilities rose nearly 2 per cent each, while banks gained 1.4 per cent.

In Frankfurt, the Dax rose 0.4 per cent, while the Cac 40 in Paris finished 0.6 per cent higher.

Chip maker STMicroelectronics gained 2 per cent after announcing plans to double its investments this year, buoyed by high demand that drove a quarterly earnings beat.

German business software group SAP fell 6 per cent after it said it has agreed to buy a majority stake in privately held US fintech firm Taulia.

Deutsche Bank climbed 4.4 per cent after making its biggest profit since 2011 last year, defying expectations for a loss in the fourth quarter.

The company that owns the WeTransfer file service said it was cancelling its initial public offering on Amsterdam Euronext, citing market volatility. WeRock had planned a flotation that would have valued the business between €629 million and €716 million.

NEW YORK

Wall Street stocks painted a mixed picture as investors digested how strong economic news could inform the Federal Reserve’s thinking on interest rate hikes, while the dollar hit its highest level in over a year.

Stocks retreated at around midday in New York, but later sentiment turned more positive.

Tesla was one of the biggest drags on the Nasdaq, with the electric vehicle maker down more than 8 per cent after it warned late on Wednesday that supply chain problems would last throughout 2022. – Additional reporting: Reuters