European stocks advance as investors shake off inflation concerns

Retail and travel companies among the strongest performers during session

Traders at work at the stock exchange in Frankfurt am Main. Photograph: Daniel Roland/AFP

Traders at work at the stock exchange in Frankfurt am Main. Photograph: Daniel Roland/AFP

 

European stocks closed higher on Wednesday as fresh signs of weakness in Asian economies were offset by hopes for more stimulus, while investors shook off concerns about rising inflation.

Retail stocks and and travel and leisure companies were among the top performers.

DUBLIN

The Iseq nudged down 0.1 per cent as key stocks slid, offsetting a gain for Ryanair. The airline, which has been bullish this week on a rebound for European short-haul travel, rose 1.45 per cent to €16.08. Smurfit Kappa was another climber, with the paper and packaging group closing 0.9 per cent higher at €49.00.

Financial stocks fell, however, with AIB declining 3.6 per cent to €2.46 on a day when it said it had completed its takeover of Goodbody Stockbrokers, after receiving all necessary regulatory approvals. Bank of Ireland slipped 0.75 per cent to €5.29.

Building materials group CRH ended down 0.8 per cent at €44.69, but it was a better session for Paddy Power owner Flutter Entertainment, which added 1 per cent to €166.40.

LONDON

The FTSE 100 ended 0.4 per cent higher for its best session in three weeks, while the FTSE 250 mid-cap index advanced 0.6 per cent, hitting another intraday record high.

Homebuilders fell 0.1 per cent despite figures from mortgage lender Nationwide showing British house prices rose by 2.1 per cent month-on-month in August.

WH Smith slipped 3.8 per cent to be the worst performing stock on the mid-cap index after the retailer provided a grim annual profit forecast. JD Sports Fashion rose 3 per cent after analysts at Berenberg raised its price target on the stock of Britain’s biggest sportswear retailer.

Meanwhile, a survey showed UK factory output grew in August at the weakest rate for six months as supply chain problems weighed on manufacturers’ recovery from the Covid-19 pandemic.

EUROPE

After seven straight months of gains, the pan-European Stoxx 600 rose 0.5 per cent to end at 473.12 points, and was within striking distance of its record high of 476.16. In Frankfurt, German stocks were flat, but the Cac 40 in Paris raced ahead 1.2 per cent.

Scandinavian airline SAS gained 2.4 per cent after reporting a smaller quarterly loss as air travel gradually picked up.

Spanish retailer Inditex, which owns fashion brand Zara, was among the best performing retail stocks after analysts from JP Morgan forecast strong second-quarter results for the company. The stock rose 3.1 per cent.

Supermarket group Carrefour was the worst performer on the Stoxx 600, down 5.5 per cent as luxury goods billionaire Bernard Arnault sold the 5.7 per cent stake he owned in the company.

French spirits maker Pernod Ricard rose 3.7 per cent after it posted a stronger-than-expected rise in full-year operating profit, driven by a strong rebound in demand in China and the US.

French diagnostics specialist BioMerieux climbed 4 per cent after it confirmed its full-year earnings target.

A survey also showed euro zone manufacturing growth remained strong in August, but supply chain issues drove up prices and fed into inflation.

NEW YORK

The Nasdaq hit a record high during trading after weaker-than-expected private payrolls raised hopes the Federal Reserve would keep the stimulus taps open, while a slide in energy and banking stocks held back the S&P 500 from scaling an all-time peak.

Technology stocks, which tend to benefit from a low-rate environment, were up 0.6 per cent.

Shares of Calvin Klein and Tommy Hilfiger owner PVH Corp surged 14.5 per cent to the top of the S&P 500 after it raised its full-year earnings forecast.

Video chip maker Ambarella gained 20.5 per cent after it beat profit estimates and forecast revenue above market expectations. Campbell Soup Co rose 1.9 per cent even as it forecast full-year profit and sales below market expectations due to a slowdown in demand and higher raw material costs. – Additional reporting: Reuters

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