European shares rally after battering earlier this week

European shares recovered on Friday after enduring a battering earlier this week as investors sold equities and commodities in anticipation of a recession.

DUBLIN

Dublin dealers said the Irish market staged an end-of-week “relief rally” after many leading stocks gained ground on Friday.

Building materials giant and index heavyweight CRH climbed 2.09 per cent to €33.03 having lost ground earlier this week on fears that a recession could hit US construction.

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Permanent TSB advanced 3.44 per cent to close at €1.355. The bank’s shareholders voted overwhelmingly on Friday in favour of its proposed take over of €7.5 billion worth of mortgages and small business loans from departing rival Ulster Bank.

Bank of Ireland gained 3.5 per cent to €6.384. Dealers observed that the lender was clawing back some of the 7 per cent it lost on Thursday.

Paddy Power and Betfair owner Flutter Entertainment added 3.52 per cent to close at €101.95. Ryanair Holdings added 1.61 per cent to €12 as airlines gained some altitude. Packaging-maker Smurfit Kapp rose 3.52 per cent to €32.90. The multinational’s shares suffered this week in the face of natural gas price rises.

Kingspan, which saw its shares lose around €10 this week after reporting a significant dip in orders, clawed 2.71 per cent back to close at €59.18.

LONDON

London’s blue-chip FTSE climbed 2.7 per cent aided by rises in healthcare and consumer stocks.

Ultra Electronics shares shot higher after the government said it was set to clear the firm’s £2.6 billion takeover by private equity-owned Cobham. Business secretary Kwasi Kwarteng said on Thursday night that he was minded to accept the takeover of Ultra after both firms put forward solutions to address national security concerns. Shares leapt by 378 pence sterling or 12.6 per cent to 3,448p as it appeared to bring an end to the 10-month inquiry into the deal.

GSK rose 2.1 per cent to 1,756.2p after French drugmaker Sanofi said the vaccine against the Omicron variant of Covid-19, which the two companies worked on jointly, had proved effective.

Plumbing giant Ferguson made gains after the company announced plans to buy back £375 million worth of stock. The company, which is US-focused, and was formerly known as Wolseley, said it has completed the latest tranche of its previously announced $2 billion (€1.9bn) share buyback programme. It closed 474p or 6 per cent higher at 9,200p.

Naked Wines suffered another drop after the damning reaction to Thursday’s warning over both its sales and earnings outlook bled into another session. The online wine retailer declined by 9.9p to 152.2p at the end of trading.

EUROPE

The pan-European Stoxx 600 index, which tracks 600 stocks across 18 markets, rose 2.62 per cent on Friday.

German online fashion retailer Zalando issued a profit warning sending its shares to over seven-year lows before it cut some losses. Its stock hit a low of €21.25, before recovering ground to around the €25 mark later in the day.

Italy’s Saipem dropped 21.8 per cent after the energy services group said it would have financial resources available for less than one year if its plans to raise capital did not go through.

US

US stocks surged and a rally in treasuries waned after a reading on inflation expectations eased and Federal Reserve official James Bullard suggested recession fears are overdone.

The S&P 500 jumped more than 2 per cent, putting it on track to snap a three-week decline. Sentiment improved further after the University of Michigan’s gauge of longer-term consumer inflation expectations settled back from an initially reported 14-year high, potentially reducing the urgency for steeper rate hikes.

– Additional reporting: Bloomberg, Reuters