European shares rose on Thursday led by gains in bank stocks after the European Central Bank delivered its biggest-ever interest rate hike to combat inflation, which is running at a half-century high and approaching double-digits.
US stock indexes slipped on Thursday after a broad-based recovery in the previous session as US Federal Reserve chair Jerome Powell’s hawkish comments cemented bets of another large interest rate hike later this month.
Dublin
The Iseq rose by close to 0.5 per cent, dragged upwards by huge surges in the two main bank stocks on the back of the ECB’s rate rise – banks make more profit when interest rates are higher.
AIB was up by more than 6.4 per cent to close at €2.48, while Bank of Ireland finished the session ahead by more than 7.8 per cent at €6.63.
Tullow Oil rose 3.2 per cent to €51.6 cents per share, as crude prices rose higher.
Ryanair, which is sensitive to fuel price moves as well as concerns over consumers’ disposable income, fell more than 2.2 per cent to €12.45.
London
Top markets were all in the green on Thursday after the prime minister, Liz Truss, committed to spending billions of pounds on freezing energy bills for households across the UK. The FTSE 100 closed the day 0.33 per cent higher.
Royal Mail denied claims from its main union that the delivery company is in “secret talks” that could end in its sale to a private equity company. The company said it had held “no such talks”. Shares in the business dropped 1.8 per cent.
In other potential takeover news, Darktrace shares fell by more than 30 per cent after the business revealed that a different private equity suitor was pulling out of talks to buy it.
The Restaurant Group, the company behind Wagamama and Frankie & Benny’s, said that sales slowed during the heatwave at the two restaurant chains.
However the firm swung from a £20 million pretax loss in the six first months of last year to a profit of £10 million in the same period this time around. Sales nearly doubled in the same period. Shares rose 2.8 per cent.
Europe
The pan-European Stoxx 600 index ended a volatile session 0.5 per cent higher, with banks rising 2.3 per cent as the ECB abandoned the two-tier system for the remuneration of excess reserves.
The German Dax was fractionally lower amid further threats to European gas supplies. It was down by 0.09 per cent while the French CAC 40 had gone up by 0.33 per cent.
European retailers shed 1.6 per cent, with Swedish retailer H & M and Zara-owner Inditex falling after US peer American Eagle Outfitters missed second-quarter profit estimates late on Wednesday.
Associated British Foods slid 7.6 per cent after it warned of lower profit next year, as its Primark fashion business struggles with rising costs and surging inflation hits demand.
Atos dropped 15.1 per cent to the bottom of Stoxx 600 index, after Goldman Sachs downgraded the French IT consulting company to “sell”, saying its weak financial profile and low visibility foretells a long way to recovery.
New York
The US Fed is “strongly committed” to controlling inflation but there remains hope it can be done without the “very high social costs” involved in prior inflation fights, Powell said in comments at a Cato Institute conference.
Eight of the 11 major S&P sectors were lower, with consumer staples and communication services leading losses. Financials rose 0.5 per cent, tracking gains in yields.
GameStop rose 2.7 per cent after the video game retailer reported a smaller-than-expected quarterly loss.
American Eagle Outfitters slumped 9.6 per cent after the retailer missed second-quarter profit estimates and said it would pause quarterly dividend as it fortifies its finances against a hit from inflation.
(Additional reporting: Reuters/PA)
