Global equities rise as US Treasury yields fall

Global equities rose on Tuesday while US Treasury yields fell as investors awaited release of the Federal Reserve’s meeting minutes for clues on US interest rates and as China’s Covid restrictions weighed on sentiment.

Dublin

Euronext Dublin was up 34 basis points, largely in line with its international peers. In the travel and leisure sector, the best performer was Irish Continental Group, which operates Irish Ferries. It finished up 3.8 per cent on the day.

Elsewhere, Ryanair was down 1.5 per cent at close of business, outperforming peers Wizz Air and EasyJet, which were down 9.5 per cent and 3.1 per cent respectively. “For Ryanair to be only down 1.5 per cent was a significant outperformance,” said one trader.

In the finance sector, Bank of Ireland was up 0.8 per cent, while AIB was down 0.4 per cent. In the gaming sector, Paddy Power Betfair parent Flutter Entertainment was up 2 per cent at the close of trading.

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CRH, which reported earlier in the day that it is sticking to its $5.5 billion (€5.4bn) full-year earnings forecast even it grapples with higher energy prices, finished down 1 per cent.

London

The FTSE 100 jumped to a more than two-month high despite a new OECD report casting an unmissable shadow over the UK’s economic prosperity.

Energy giants moved to the top of London’s blue-chip index with the likes of Shell, BP and Harbour Energy all seeing their shares rise by more than 4 per cent.

The boost comes despite the OECD predicting the UK’s economy will contract more than any other of the world’s seven most advanced nations next year. It is expected to shrink by 0.4 per cent in 2023 and grow by just 0.2 per cent in 2024. Nevertheless, investors flocked to the London Stock Exchange as oil prices saw a rebound, helping to push up the index. The FTSE 100 closed 1 per cent higher.

Shares in AO World surged by more than 16 per cent despite revealing its half-year losses had widened after sales fell.

Water company Severn Trent said its underlying pre-tax profits hit more than £260 million (€300m) in its half-year earnings, as it reported it is ramping up support efforts for vulnerable customers and investing in its regions. Shares in the UK’s second-biggest water firm dipped by 0.69 per cent.

Meanwhile, the share price of food manufacturer Cranswick moved up almost 4 per cent after the group said it is making good progress despite the “relentlessly challenging” operating environment.

Europe

European stocks also enjoyed an uplift, albeit at a steeper rate than in London. The German Dax was up 0.29 per cent and the French Cac lifted 0.35 per cent. The Stoxx Europe 600 rose 0.7 per cent.

Joshua Mahony, senior market analyst at online trading platform IG said: “European markets have provided an area of optimism today, with equities outperforming their US counterparts despite growth concerns raised by the OECD.”

New York

US stocks rose as investors recalibrated their expectations in response to Federal Reserve officials indicating that they’ll continue to raise interest rates but are open to slowing their tempo. A batch of upbeat earnings also buoyed sentiment.

Top indices were in the green when European markets closed. The S&P 500 was up by 0.75 per cent and Dow Jones was 0.81 per cent higher.

Analog Devices climbed after giving a bullish forecast for the current period. Best Buy jumped after raising its profit forecast. Abercrombie & Fitch and American Eagle Outfitters also rose after reporting results that beat estimates. Retailers clearing out their inventories with a series of sales could help reduce inflation, which could ultimately make the Fed turn dovish.

Despite the rally, China’s Covid control restrictions are still weighing on investors. Shutdowns can have a negative impact on supply-chain dynamics and possibly exacerbate inflation issues across economies. Chinese stocks listed in the US fell on the day. (Additional reporting: Agencies)