European stocks rally as energy prices cool

Relief on US debt ceiling soothes investors

European stocks rallied in early trading on Thursday as easing oil and gas prices offered some relief to investors worried about runaway inflation.

The pan-European Stoxx 600 index rose 1.1 per cent in broad-based buying to reverse weekly losses, with miners , automakers and utilities in the lead.

Oil prices dropped for a second session, while European gas futures also fell back from record highs.

There was also some relief on the US debt ceiling front after US Senate Republican Leader Mitch McConnell announced plans to extend the borrowing limit into December.

French luxury goods maker Hermes jumped 3.1 per cent after HSBC upgraded the stock to "hold", while peers LVMH, Richemont and Kering all rose more than 2 per cent.

Royal Dutch Shell inched up 0.4 per cent after saying that soaring natural gas and electricity prices around the world will provide a significant boost to its cashflow in the third quarter.

Swiss construction chemicals maker Sika rose 2.0 per cent after it said it could overcome rising raw material costs and supply chain restrictions to increase its sales and profit margins this year.

London’s FTSE 100 jumped on Thursday, led by gains in travel and heavyweight mining stocks, while recruitment firm Robert Walters rose sharply on strong profit forecasts. The blue-chip FTSE 100 gained 1 per cent by 0705 GMT, with miners Glencore, Anglo-American and Rio Tinto among the top boosts.

Miners added 1.8 per cent, tracking higher metal prices. Oil major Royal Dutch Shell rose 0.5 per cent after saying it expects significant cash boost in third-quarter revenue due to soaring gas and power prices.

Homebuilder stocks climbed 0.7 per cent after mortgage lender Halifax said British house prices rose by the most in almost 15 years in September. The domestically focussed mid-cap index advanced 0.8 per cent, with travel stocks among the top performers.

Shares of online auto retailer Pendragon PLC climbed 4 per cent after reporting a strong third-quarter performance. Workspace climbed 2 per cent after it said utilisation of its centres by the end of September peaked at 56 per cent of pre-Covid levels mid-week. British recruitment firm Robert Walters rose 2.6 per cent after it said its annual profit would be ahead of its expectations as it benefits from a hot jobs market – Reuters