European shares ended higher on Thursday with travel stocks leading gains after Ryanair expressed confidence in a recovery this year.
Bond yields retreated from recent peaks, taking some pressure off equities. The pan- European Stoxx 600 closed up 0.5 per cent, overcoming early losses and extending a recovery into a second consecutive session. Travel stocks were the best performing European sector, rising 2.9 per cent.
Broader European equities benefited as German bond yields dropped back below 0 per cent, retreating from a series of strong gains this week. Utility and technology stocks rose 1.7 per cent and 1.5 per cent, respectively. The two sectors usually tend to underperform in high-rate environments, and have fallen substantially this year.
Ryanair led the charge on Dublin's Iseq, rising 4.2 per cent to €16.90. The company announced that it would fly to 120 destinations from Dublin this summer in what it says will be its biggest ever schedule from the Irish airport.
AIB and Bank of Ireland both traded lower, falling 4 per cent and 2.2 per cent respectively, as the likelihood of the European Central Bank lifting rates this year was extinguished by ECB chief Christine Lagarde. She said euro zone inflation will decrease gradually over the year, adding that the ECB did not need to act as boldly as the US Fed because of a different economic situation.
Insulation maker Kingspan gained 2.2 per cent to close at €90.38. Hotel group Dalata traded up but not by as much as other travel-related stocks, rising 0.4 per cent to €3.99.
London's FTSE 100 slipped on Thursday on weakness in oil stocks and GlaxoSmithKline, while food delivery platform Deliveroo jumped on order growth hitting the top of its outlook range. The blue-chip index ended 0.1 per cent lower, weighed down by oil majors Royal Dutch Shell and BP as they tracked weaker crude oil prices. GlaxoSmithKline fell 1.8 per cent and was among the biggest loser on the FTSE 100 after consumer goods giant Unilever late on Wednesday effectively ended its pursuit of a business that the pharmaceuticals company plans to spin off later this year.
Food delivery company Deliveroo rose 1.4 per cent on strong fourth-quarter order value growth, resulting in it hitting the top of its outlook range for the year.
British prime minister Boris Johnson on Wednesday announced the end of Covid-19 measures including mandatory face masks in England. The domestically focused mid-cap index rose 0.3 per cent.
Primark owner Associated British Foods dropped 4.2 per cent after it said spread of the Omicron coronavirus variant dented shopper numbers in December. Premier Foods was among the top midcap gainers, up 7.8 per cent, and said it expects full-year profits above market expectations, as its trademark Mr Kipling brand delivered its best-ever Christmas sales.
The broad Stoxx 600 index has struggled for direction this week as investors fretted over soaring inflation and eventual policy tightening this year. Positive earnings updates and commodity-linked gains, however, aided sentiment. Data showed German producer prices rose at a record rate in December, driven by higher energy prices.
"Investors are considering the best port of call in a world where money stops sloshing around, and growth stock darlings begin to look less attractive," said AJ Bell financial analyst Danni Hewson. Metal-cutting tools and mining gear maker Sandvik advanced 1.3 per cent after posting quarterly earnings just above analysts' expectations and noting strong demand. German sportswear maker Puma rose 1.2 per cent after posting stronger than expected preliminary quarterly sales and core profit.
US stock indexes rose on Thursday on strong earnings reports, while bargain hunting boosted mega-cap growth companies after the Nasdaq index plunged into correction territory in the previous session. The Nasdaq has had a rough two months since hitting a record peak in November. Recovering somewhat from Wednesday's selloff, growth companies Microsoft and Tesla gained 2.5 per cent and 3.8 per cent, respectively.
The S&P 500 consumer discretionary, technology and communication services were the sectors that gained the most on the benchmark index. Netflix, which is set to kick off earnings for big growth companies after the market close, rose 1.4 per cent. – Additional reporting: Reuters