European stocks enjoy broad rally for fourth straight weekly gain

European stocks rallied on Friday after US jobs data backed bets the Federal Reserve would deliver smaller rate hikes, while mining and luxury goods stocks were boosted by hopes of easing Covid restrictions in China.

Thanks to a largely better-than-expected earnings season and hopes that central banks will slow their pace of monetary policy tightening, the benchmark STOXX 600 index marked its fourth straight weekly gain, rising 1.5 per cent over the course of the week.

Dublin

The Iseq Index finished the week with a 1.4 per cent climb on Friday with its biggest companies securing gains. Ryanair added 1.15 per cent to close at €12.30 on a good day for airline stocks across Europe, while packaging group Smurfit Kappa advanced 2.4 per cent to €33.65.

There were contrasting fortunes for the banks, with AIB rising 2.3 per cent to €3.06 but Bank of Ireland, a stock exposed to the faltering UK economy, slipping 2 per cent to €7.56.

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Building materials group CRH finished 2.4 per cent higher a €36.90, while Paddy Power-owner Flutter Entertainment rose 1.6 per cent to €131.25.

London

Britain’s blue-chip shares marked their best week in almost two years on Friday, with miners and Asia-exposed stocks lifted by hopes China will relax its Covid measures. The FTSE 100 index climbed 2 per cent in the session, while the mid-cap FTSE 250 index added 1.3 per cent.

HSBC jumped 5.8 per cent along with gains in other Asian-exposed companies even as its largest shareholder, Ping An, urged the lender to aggressively reduce costs by cutting jobs and divesting peripheral non-Asian businesses. Insurer Prudential, bank Standard Chartered and luxury goods maker Burberry rose between 4 per cent and 9 per cent.

Investors also took heart from the Bank of England signalling this week that peak interest rates would be less than what markets had originally priced in.

National World, the publisher that owns the Scotsman and Yorkshire Post, slipped 2.4 per cent after it said it was exploring a cash offer for Daily Mirror-owner Reach. Reach, which is active in the Irish media market, rose 1.9 per cent.

Europe

The STOXX 600 closed 1.8 per cent higher on the day, with basic resources, personal and household goods and automakers leading a broad rally. In Frankfurt the Dax advanced 2.5 per cent, while in Paris the Cac 40 was up almost 2.8 per cent.

Luxury giants including LVMH, Kering, Pernod Ricard and Hermes International, which have a large exposure to China, climbed between 3.7 per cent and 7.1 per cent.

The Euro STOXX volatility index, dropped to an 11-week low, reflecting easing anxiety among investors.

Adidas shot up 21.4 per cent to the top of the STOXX 600 after it was reported in Germany that outgoing Puma chief executive Bjorn Gulden is set to become the new Adidas head.

US

Wall Street’s main indexes slipped in choppy early trade as investors digested a mixed jobs report that had lifted hopes of the Federal Reserve shifting to smaller rate hikes in the future.

A closely-watched report showed an uptick in the unemployment rate in October, pointing to some cooling in the labour market that could give the Fed cover to reduce the size of its rate hikes from December.

Mega-cap technology firms Alphabet and Microsoft rose 1.8 per cent and 1.6 per cent respectively in volatile trade. US-listed shares of Chinese companies including Alibaba, JD.com and Baidu gained between 5 per cent and 9 per cent.

Starbucks rose 7.8 per cent after it topped Wall Street estimates for quarterly comparable sales and profit, while DoorDash’s revenue beat lifted the food delivery firm’s shares 5.8 per cent. PayPal Holdings fell 5 per cent after the online payments firm cut its annual revenue growth forecast.

– Additional reporting: Reuters