European shares ended higher on Thursday as a rally in crude prices saw energy stocks surge ahead, with house builders standing out as a bright spot in Dublin on the back of an upbeat trading update from Cairn Homes.
The pan-European Stoxx 600 closed 0.6 per cent higher at 455.63 points, with energy stocks marking their best day in one month as oil prices rose almost $2 on the prospect of increasing global demand. It was also reported that Opec would hike production by less than expected, which could result in a supply shortfall and support oil prices later this year.
Still, overall gains were capped by ongoing concerns over the infectious Delta variant of coronavirus.
Cairn Homes jumped 4.1 per cent to €1.10 after the house builder raised its operating profit guidance for the next two years, with the company saying that demand for homes has never been stronger at a time when the lack of supply has never been more acute. Rival Glenveigh Properties added 2.1 per cent.
Banking stocks were also in demand, with AIB up 1.4 per cent at €2.20, while Bank of Ireland gained 1.8 per cent to €4.60.
However, Datalex dropped 9.4 per cent to 72.5c on news that Lufthansa is countersuing the travel retail software provider for €9.7 million amid an ongoing dispute over a major contract that was terminated in late 2019.
London’s Ftse 100 climbed 1.25 per cent, starting the second half of the year on a strong note, with heavyweight energy stocks and bank stocks leading the gains.
JD Sports Fashion gained 5.4 per cent and was the index's top gainer, after Britain's biggest sportswear retailer said it would split long-time boss Peter Cowgill's role as executive chairman and recruit a chief executive over the next year.
Food and clothing retailer Associated British Foods rose 4.8 per cent to post its best session in more than four months, after third-quarter sales at its Primark fashion stores, which reopened after Covid-19 lockdowns, came in ahead of expectations in all markets.
Travel stocks gained as UK prime minister Boris Johnson said he was confident Britons fully vaccinated against Covid-19 would be able to travel abroad this year.
Germany’s Dax rose 0.5 per cent as data showed retail sales in Europe’s biggest economy rebounded in May.
Technology stocks, which had outperformed through the pandemic, were the sole losers for the day, down 0.7 per cent. Investors were probably comfortable in pivoting to sectors more exposed to an economic recovery.
French catering and food services group Sodexo rose 2.3 per cent after boosting its second-half revenue and profit margin forecasts, betting on the full reopening of US schools.
Sodexo's peer, Denmark's ISS, jumped 6.6 per cent to the top of the Stoxx 600, after the news.
Fashion retailer H&M, on the other hand, fell 1.1 per cent as its second-quarter earnings remained well below pre-pandemic levels.
The benchmark S&P 500 index kicked off the second half of the year at a record high on Thursday as data showed fewer-than-expected weekly jobless claims, while energy stocks were supported by a spike in oil prices.
Initial claims for state unemployment benefits dropped 51,000 to a seasonally adjusted 364,000 in the week ended June 26th, while lay-offs plunged to a 21-year low in June as companies held on to their workers amid labour shortages.
Walgreens Boots Alliance dropped as it lowered its forecast for Covid-19 vaccine shots to be administered this year.
Micron Technology slumped even as the chip maker beat estimates for quarterly profit and forecast fourth-quarter revenue above expectations.
MGM Resorts International rose after the US casino operator said it would buy the remaining 50 per cent stake in its joint venture, CityCenter Holdings, for $2.13 billion (€1.8 billion) from Infinity World Development.