European stocks rose on Thursday, hitting the highest level in more than two weeks as investors bet a steady economic recovery from the pandemic-induced slump will support corporate earnings despite signs of elevated inflation. Mining shares jumped 3.3 per cent, their biggest daily gain in three months, technology stocks rallied again and the pan- European Stoxx 600 index rose 1.2 per cent.
European chipmakers, including ASML, Infineon and BE Semiconductor, were among the top gainers in the tech sector after Taiwan chip giant TSMC posted a 13.8 per cent jump in third-quarter profit due to booming demand for semiconductors. China's factory gate inflation rose in September to a record high on soaring commodity prices. Many still hope inflation will be transitory, but supply-chain disruptions, a global energy crisis and labour shortages have fuelled concerns that central banks could raise interest rates sooner, accelerating plans for a gradual exit from the pandemic-era stimulus.
"Equity markets appear to have shaken off their caution of recent weeks," said Chris Beauchamp, chief market analyst at IG.
AIB rose 1.4 per cent to €2.40. The climb came as the bank announced that its non-performing loans ratio would fall below 6 per cent after an agreement to sell €400 million of problem mortgages to a consortium involving US-based Ellington Financial and Mars Capital Finance Ireland.
Rival Bank of Ireland rose 1.7 per cent to €5.07.
Increased economic activity generally sent Dalata shares up nearly 2 per cent to €4.16.
After a capital markets day on Wednesday, Kerry was down marginally at €116.70.
Ryanair had another strong day, rising 3 per cent to €16.94. The budget airline said on Wednesday that it would ban passengers from travelling unless they paid back refunds for flights they did not take during the pandemic.
Packaging giant Smurfit Kappa was up 1.6 per cent at €45.57.
Analysts expect third-quarter profit for Stoxx 600 companies to climb 46.7 per cent from a year ago, according to Refinitiv IBES data, with energy companies enjoying the biggest revisions.
Among individual stocks, French advertising group Publicis gained 2.7 per cent after it raised its outlook for 2021 as a global shift towards digital media and ecommence helped third-quarter organic growth exceed market expectations.
Danish food ingredients maker Chr Hansen dropped 6.7 per cent after fourth-quarter profit came in below estimates.
SAP gained 2.9 per cent, the biggest boost to the tech sector, after the German software firm's shares jumped nearly 4 per cent in the previous session following a strong quarterly report.
The biggest drag on the Stoxx 600 was AstraZeneca, down 0.5 per cent. Europe's drug regulator said it had started a real-time review of the drugmaker's antibody-based Covid-19 therapy.
The FTSE 100 enjoyed a solid day's trading on Thursday as investors reacted to strong jobs news in the United States. Jobless rates fell again and this encouraged traders to pour into traditional risk on investments. As a result, it helped the FTSE 100 lift up by 65.89 points, or 0.92 per cent, to 7,207.71 at the close of play, while Wall Street's main markets also leapt higher on the opening bell.
London stocks were also buoyed once again by commodity firms which rose on the back of soaring prices for copper, aluminium, oil and natural gas.
"The FTSE 100 has managed to get back near to its recent range highs, led by the likes of Anglo American, Antofagasta and Glencore, while oil prices are helping to support the likes of BP and Royal Dutch Shell, " said Michael Hewson, chief market analyst at CMC Markets UK.
In company news, recruiter Hays said September was its best month since the pandemic struck as firms worldwide scramble to secure talent amid a skills shortage. The group saw like-for-like fees jump 41 per cent in its first quarter to the end of September, helping shares close up 4.9p at 167.2p.
The bosses of Rolls-Royce, Shell and Airbus called for more work to reduce the carbon impact of flying.
Wall Street's main indexes rallied on Thursday, boosted by technology stocks and strong quarterly results from Bank of America and Walgreens, while better-than-expected economic data eased some concerns about higher inflation. Citigroup, Bank of America Corp and Morgan Stanley topped quarterly earnings estimates, helped by release of more reserves to cover loan losses, with torrid dealmaking, equity financing and trading activity adding to their profits. Their shares gained between 0.1 per cent and 3.3 per cent.
Walgreens Boots Alliance jumped 5.9 per cent to top the S&P 500 and the Dow, after the drugstore chain reported fourth-quarter revenue and adjusted profit above estimates and forecast growth of 11 per cent to 13 per cent in the long term.
"The market strength today is partly predicated on better than expected earnings," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey. – Additional reporting: Reuters