European stocks rose on Thursday as travel names broke a four-day losing streak after Ryanair lifted its long-term traffic forecast, offsetting concerns about China's slowing economy that dragged down miners. The pan-European Stoxx 600 index climbed 0.4 per cent, bouncing off a six-week closing low hit in the previous session. Travel and leisure stocks rose 3.4 per cent.
"It's been a slightly better day for markets in Europe, shrugging off a weak Asia hand-off, with some decent gains for travel and leisure, which has enjoyed a respite after Ryanair's announcement," said Michael Hewson, chief market analyst at CMC Markets UK.
While Asian stocks came under pressure from concerns about China's economy and the fallout from debt-ridden developer China Evergrande Group's financial troubles, European stocks were on a firm footing as strong US data reinforced optimism about a recovery in the world's largest economy.
Ryanair jumped 7.9 per cent to €16.62 after it raised its long-term traffic forecast. The airline said it now expected to fly 225 million passengers a year by 2026, up from 200 million previously as it eyes a strong recovery from the Covid-19 pandemic. The company said earlier this week that it intended to hire 5,000 new staff over the next five years.
The State's two main banks, AIB and Bank of Ireland, rose 1.6 per cent and 1.9 per cent respectively as investors digested weaker-than-expected US inflation data, which suggests the Federal Reserve might be more dovish at next week's policy meeting. The Fed is preparing to reduce its bond-buying programme and determine how soon to lift interest rates from near zero.
Cairn Homes rose 3 per cent to €1.13 after last week reporting higher profits and revenues for the six months to the end of June and noting that demand for new homes was at its strongest level since the company was established.
Speculation that the UK's international travel restrictions might soon be overhauled sent airlines soaring on Thursday. According to reports, those who have had two vaccinations might be able to travel without quarantine into all but the worst-hit countries, and avoid costly PCR tests when travelling to the UK. Traders responded to this speculation on Thursday by sending shares in EasyJet and Wizz Air close to the top of the Ftse 250. On the index's larger cousin, the Ftse 100, Aer Lingus and British Airways owner IAG and aircraft engine maker Rolls-Royce soared.
"The UK's traffic light system has come in for considerable criticism from both industry bosses and consumers so it's little wonder the speculation that it's about to be scrapped has chimed with investors," said AJ Bell financial analyst Danni Hewson.
The bottom 10 performers on the index included eight mining giants: Anglo American, Rio Tinto, Fresnillo, BHP, Glencore, Antofagasta, Polymetal and Evraz.
High street fashion brand Superdry reported a pretax loss of £36.7 million for the year to April 24th, compared with a £166.9 million loss a year earlier, but bosses said they believed the brand was "turning the corner".
German automotive supplier Continental fell 6.2 per cent to the bottom of the Stoxx 600 after the spin-off of its unit Vitesco. The utilities index was flat after a near 3 per cent fall on Wednesday. Spain passed emergency measures earlier this week to reduce energy bills, raising concerns over the hit to utilities' profits. Endesa and Iberdrola extended losses for a third day to fall to their lowest since 2020. Italy is also looking to introduce short-term measures to offset the expected rise in retail power prices, a minister said in a radio interview.
“Stocks in the sector are suffering from the risks of regulatory intervention, as in Spain, and it will be necessary to see how other governments in Europe will intervene,” Equita analysts said. “Current prices do not reflect high energy and gas prices.”
Paris Match magazine owner Lagardere surged 19.5 per cent after media group Vivendi said it would buy another stake in the company, paving the way for a full takeover.
Wall Street indexes fell on Thursday as an unexpected rise in retail sales pointed to resilience in the economic recovery, pushing up yields and spurring a broad move out of heavyweight technology stocks. Economically sensitive sectors fared better than their peers, with financial stocks falling 0.2 per cent in early trade – the least among the S&P sectors.
An index of transport stocks – a common gauge of economic optimism – added 0.2 per cent. US-listed Chinese stocks extended losses, with Beijing's regulatory overhaul of gambling in Macau coming as the latest trigger for a sell-off in a sector that has already lost billions of dollars due to crackdowns on technology and education services.
US-based casino operators Las Vegas Sands Corp and Wynn Resorts Ltd fell more than 3 per cent each.
A batch of weak Chinese economic data, coupled with concerns over a debt crisis at the country’s second-biggest property developer, has also dented appetite for China-exposed stocks in recent sessions.
Among other movers, electric car maker Tesla fell 0.7 per cent after funds run by Cathie Wood's ARK Invest sold about $128 million worth of the firm's shares in the past two days.