Markets rally as US boosts expectations
European shares recoup this week’s losses following strong economic data from US
All three major US indexes were up almost 2 per cent on Thursday. Photograph: Lucas Jackson/Reuters
Stock markets around the world rallied on Thursday and crude oil rebounded after strong US economic data and hints from a Federal Reserve policymaker that a September interest-rate hike was unlikely.
In Europe the FTSEuroFirst index of leading European companies closed up 3.7 per cent. Germany’s Dax , France’s Cac 40 and Britain’s FTSE 100 also climbed more than 3 per cent.
The two main Chinese indices surged 5.3 per cent and 5.9 per cent, ending a five-day losing streak that wiped about 20 per cent in market value and sent tremors around global financial markets.
Crude oil rocketed more than 6 per cent in a snapback from a deep two-month slump as stock market rallies and news of diminished oil supplies drove a short-covering surge.
The charge was led by Paddy Power, which rose 4.7 per cent to €97.30 following a 20 per cent surge in the previous session. The bookmaker’s shares were buoyed this week by a proposed merger with rival Betfair. Iseq heavyweight CRH finished up nearly 6 per cent up at €26.01 after it agreed to acquire US-based glazing company CR Laurence for $1.3 billion.
Ryanair closed up 4.1 per cent at €12.42, roughly in line with industry rivals. Smurfit Kappa also bounced back, rising nearly 6 per cent to close at €26 after it dropped 2.8 per cent on Wednesday.
FBD, whose share value has swung wildly of late, closed nearly 11 per cent up at €5.85. Its shares fell by more than 20 per cent earlier in the week amid the global stock crunch and after it unveiled €96 million in losses earlier this month.
Bank of Ireland and Permanent TSB closed up 2 per cent and 1 per cent at €0.35 and €4.70 respectively. The Iseq closed up 3.5 per cent at 6,332.
The blue-chip FTSE 100 Index rose 212.8 points to 6192, adding £54 billion to the value of its constituent companies. The 3.6 per cent rise was the steepest since October 2011.
Mining stocks led the recovery. Anglo American was up 9 per cent to 726.3p while BHP Billiton was close behind with an increase of 93p to 1102.5p and Antofagasta climbed 50p to 611.5p. Asia-focused bank Standard Chartered was up 7 per cent at 757p.
Challenger bank Aldermore leapt 8 per cent to 300p in the FTSE 250 Index after interim profits more than doubled on last year to £39.5 million.
Recruiter Hays climbed too after posting an 18 per cent rise in pretax profits to £156.1 million for the year to the end of June.
European shares rose, recouping all their losses this week, with gains across the board after market expectations of a US rate hike were pushed back and as economic growth figures were revised sharply upwards.
The pan-European FTSEurofirst 300 index closed up 3.6 per cent, while the blue-chip Euro STOXX 50 index gained 3.5 per cent.
Bouygues was one of the best-performing stocks, rising 5 per cent. French drinks maker Pernod Ricard fell 1.7 per cent. Germany’s largest medical-supplies provider Fresenius added 6.2 per cent .
All three major US indexes were up almost 2 per cent and increased appetite for risk sent government bond prices and the Japanese yen down while the dollar advanced.
Annual GDP growth was revised to 3.7 per cent from the 2.3 per cent rate reported last month and last week’s jobless claims fell more than expected.
By early evening, the Dow Jones industrial average was up 2.26 per cent at 16,653.16, the S&P 500 was up 2.43 per cent at 1,987.63, and the Nasdaq composite was up 2.48 per cent at 4,813.89.
Providing the biggest boost to the S&P and the Nasdaq, Apple shares were up 2.9 per cent at $112.94. It is expected to unveil new iPhones and possibly a new version of its Apple TV set-top box in September.
St Jude Medical was up 4.5 per cent at $72.47. Tesla was up 8.5 per cent at $243.69.