Stocks rally on positive US inflation signals

Global stocks climbed on Tuesday as investors cheered fresh US producer price data that confirmed a slowdown in inflation, strengthening the case for the Federal Reserve to moderate its pace of interest-rate hikes.

Treasuries rallied, with the 10-year yield declining to about 3.80 per cent while the dollar fell and the pound rallied ahead of UK chancellor Jeremy Hunt’s economic statement on Thursday.

Dublin

The Iseq index of Irish shares climbed gained nearly 0.7 per cent on Tuesday after Monday’s 1.2 per cent decline.

After a mixed session for financials on Monday, Bank of Ireland and AIB gained 3.7 per cent and 2.6 per cent to finish Tuesday’s session at €7.55 and €2.90 per share respectively. Traders in Dublin said the performance of large caps skewed the overall index on the day, with Paddy Power owner Flutter Entertainment up 0.5 per cent on the session to close at €130.55. Shares in building materials giant CRH finished at €38.64, up almost 1.4 per cent, as investors position themselves ahead of a trading update from the company next week.

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Ryanair’s share price was essentially flat on the session at €13.14. After giving up half a per cent on Monday, shares in box-maker Smurfit Kappa’s fell 14 per cent to €36.17 at closing bell in Dublin.

London

Gains in the utilities and energy subsectors weren’t enough to offset a decline in the FTSE 100 index on Tuesday as shares in Vodafone weighed heavily on the top London index. The telecoms company saw its share price tumble by close to 7.8 per cent after the company cut its full-year free cash flow forecast and said annual earnings would come in the bottom range of its target.

Weighed down by a column in The Times urging investors to avoid the stock amid the UK’s spiralling cost-of-living crisis, shares in supermarket and retail tech company Ocado shed more than 16 per cent. The company’s market value has shrunk by more than two thirds since a peak at the end of 2020.

Europe

European equities closed higher after lower-than-expected producer inflation data in the US. The pan-Europe Stoxx 600 index was up a quarter of a percentage point while the blue-chip Stoxx 50 index gained half a per cent led by Dutch tech investor Prosus and German pharma giant Bayer.

The German DAX Index was up 0.4 per cent and was set to enter a bull market on the improving sentiment out of China.

European equities are trading around their highest level in three months after better-than-expected third-quarter earnings and as US inflation cooled more-than-expected in October.

French TikTok subcontractor Teleperformance, up more than 10.7 per cent, topped the index. The company’s share price has continued to rebound from oversold levels in recent days after losing one third of their value after details emerged of a Colombian investigation into the company’s labour practices.

Shares in German energy giant Uniper climbed 6.3 per cent after Germany announced the completion of its first floating terminal for liquefied natural gas at the North Sea port of Wilhelmshaven.

Moving in the opposite direction, shares in Danish medical device maker Ambu, a favourite among short sellers, lost as much as 16 per cent of their value after a disappointing full-year forecast.

New York

US stocks climbed after the producer price index for October came in at 8 per cent year-on-year, undershooting the 8.3 per cent estimate and further easing inflation concerns. With markets turning risk-on in recent days, the S&P 500 rose as much as 1.8 per cent while the tech-heavy Nasdaq 100 soared as much as 2.8 per cent. Both indexes were buoyed by gains in Apple, up 3 per cent by closing bell in Dublin, and Microsoft, up 1.5 per cent

Shares in global ecommerce giant Amazon gained more than 2 per cent after reports that it plans to shed 10,000 jobs globally in a bid to trim costs. Walmart’s earnings, which topped estimates, also boosted sentiment and lifted stocks.

Crypto markets stabilised as investors grow hopeful that the fallout from FTX’s insolvency might remain somewhat contained.

Bitcoin, the largest token, climbed as much as 4.4 per cent to $17,102, while second-ranked Ether advanced as much as 5 per cent. Smaller cryptocurrencies known as alt-coins such as Solana and Polkadot also advanced for a second day. The modest gains provides some much-needed reprieve after the most recent plunge. Bitcoin dipped last week to its lowest price since November 2020 as the meltdown of crypto exchange FTX rattled investors.