European stocks edge higher following interest rate hike

Shares edged up after the ECB announced a bigger than expected 0.5 per cent increase in interest rates.

DUBLIN

Permanent TSB emerged as one of the day’s winners following the European Central Bank (ECB) move on interest rates. The heavily mortgage-focused lender surged 7.5 per cent to €1.29. Bank of Ireland gained 1.23 per cent to close at €5.938. However, AIB was almost static, dipping 0.18 per cent to €2.176.

Elsewhere, Kingspan enjoyed another good day, following a strong performance on Wednesday. The insulation and building materials specialist added 3.24 per cent to €59.98. The Cavan-based group’s shares bounced back this week after enduring a more volatile period recently, dealers noted.

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Ryanair shed 1.88 per cent to €12.555 as investors shied away from airlines on news of a possible pilots’ strike at Lufthansa. The Irish carrier, Europe’s biggest, confirmed that it had completed pay deals with 85 per cent of pilots after reaching agreements with French and Spanish unions. However, it has yet to strike a deal with Irish pilots.

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Packaging manufacturer Smurfit Kappa gained 1.95 per cent to close at €33.54. Dealers said European industrial stocks did well on Thursday. Ferry operator Irish Continental Group added 2.17 per cent to €4.

LONDON

Irish DIY and builders’ merchant Grafton enjoyed a second strong day after rival Howden Joinery reported strong first-half results, boosting the sector generally.

Grafton added 2.06 per cent to close at 812p. The group, owner of Woodie’s DIY, is listed in London and does much of its business in Britain and Europe.

Howden Joinery climbed 4.23 per cent to 655.5p after reporting that pretax profits for the 24 weeks to June 11th rose almost 22 per cent to £145 million on a 16 per cent jump in sales to £913 million.

Dealers said chief executive Andrew Livingston’s comments that momentum for the “all-important” second half of its financial year helped to stoke investors’ enthusiasm for the stock.

Housebuilder Persimmon added 2.5 per cent to close at 1,844p.

Online supermarket Ocado fell 2.8 per cent to 753.2p after revealing a sales slump as customers cut the size of their orders in response to the rising cost of living and the end of Covid curbs.

Aer Lingus and British Airways owner IAG shed 2.16 per cent to close at 113.46p.

News that Lufthansa pilots were voting on whether to strike in a dispute with the company over a backdated pay claim made investors nervous of airlines on Thursday. Budget airline Easyjet fell 1.92 per cent to 382.9p.

EUROPE

Lufthansa shed 4 per cent on Thursday to close at €5.99 as German pilots’ union VC balloted members there on a strike.

Reports said that if a vote favours it, pilots could walk out in August, further disrupting the airline, which has wrestled with cancellations and other operational issues as its industry grapples with a faster than expected post-Covid recovery.

Air France retreated 1.72 per cent as investors feared that industrial unrest could add to air travel’s other difficulties.

The benchmark Span-European Stoxx 600 closed 0.4 per cent higher despite the European Central Bank’s stiffer than expected interest rate hike. The move left some analysts speculating that the bank would not announce further increases this year.

NEW YORK

On Wall Street, the S&P 500 took another leg up, led by tech and consumer discretionary stocks. Tesla topped the leaderboard after its quarterly results beat estimates. AT&T fell after saying some customers are starting to put off paying their phone bills.

Data showed US jobless claims rose for a third week to the highest since November, suggesting softening in the labour market. Meanwhile, the Philadelphia-area manufacturers’ outlook for business conditions slumped to the lowest level since 1979. — Additional reporting: Bloomberg, Reuters