European shares rise after gains for energy and chemicals stocks

European shares rose on Wednesday, as investors took positive cues from US Federal Reserve chair Jerome Powell’s overnight remarks as well as upbeat earnings from energy and chemicals firms.

Mr Powell’s remarks on Tuesday, in which he again referred to the process of “disinflation”, were interpreted as less hawkish than feared by markets still reeling from the shock of Friday’s surprisingly strong US labour data.

Dublin

The Iseq fell 0.5 per cent, going against the mostly positive trend on major European indices.

Smurfit Kappa dropped 3.1 per cent to €37.91 on its Dublin listing, despite beating earnings estimates and issuing a positive outlook statement, while the packaging giant also fell 3.3 per cent in London after it said its Germany and the UK markets performed below expectations in 2022.

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Insulation-maker Kingspan, which releases preliminary results next week, declined more than 8 per cent to €58.30, while Dalata hotel group dropped 2 per cent to €3.98.

But it was a better session for Ryanair, with the airline advancing 1.9 per cent to €15.42.

London

Britain’s blue-chip FTSE 100 index briefly hit a record high on Wednesday, boosted by gains in oil major BP.

The exporter-heavy FTSE 100 rose 0.3 per cent at close after hitting an all-time high of 7,934.30 in intra-day trading, surpassing its previous peak of 7,906.58 hit last week. The mid-cap FTSE 250 index climbed 0.6 per cent.

Shares of BP rose 3.3 per cent to a more than three-year high, extending gains after the British energy giant on Tuesday reported record profit for 2022.

Drugmaker AstraZeneca climbed 1.6 per cent ahead of its quarterly results on Thursday.

Investors are keeping a close eye on the UK gross domestic product (GDP) data due to be published on Friday, with the preliminary reading expected to show the British economy contracted 0.3 per cent last December, but likely avoided a technical recession in the fourth quarter.

Europe

The pan-European Stoxx 600 closed 0.3 per cent higher having retreated from nine-month highs hit earlier in the session after other Fed policymakers sounded a more hawkish tone than Mr Powell.

New York Federal Reserve president John Williams and Fed governor Lisa Cook said restrictive monetary policy was still needed to tackle inflation.

The energy sector, up 1.7 per cent, was the top gainer in Europe, boosted by a 10.6 per cent rise in Finnish refiner Neste and a 6.8 per cent gain in Norwegian oil and gas producer Equinor after fourth-quarter earnings beats.

Dutch paints maker Akzo Nobel jumped 1 per cent after projecting lower raw material costs, while shares of Yara rose 3.4 per cent after the fertiliser maker beat quarterly earnings forecasts.

Germany’s Linde climbed 3 per cent, extending gains, after the world’s largest industrial gases company forecast higher 2023 earnings.

Limiting the upside for the Stoxx 600, Societe Generale fell 5 per cent after France’s third biggest bank hiked provisions for bad loans fivefold.

Jewellery maker Pandora rose 10.6 per cent on better-than-expected fourth-quarter results while Sweden’s Handelsbanken slumped 8.6 per cent after proposing a lower-than-expected payout for shareholders.

New York

US main stock indexes slipped in early trading as the comments from Fed officials exacerbated worries that the central bank will keep hiking interest rates this year.

In a bright spot, Microsoft rose 1.5 per cent after the tech giant said it was revamping its Bing search engine and Edge web browser with artificial intelligence.

Offsetting Microsoft’s gains was Alphabet, which was down 7 per cent after its much anticipated AI chatbot Bard delivered an incorrect answer in an online advertisement.

Activision Blizzard slid 1.6 per cent after the UK’s antitrust regulator said Microsoft’s purchase of the Call of Duty maker raised competition concerns about cloud and console gaming.

Uber Technologies rose 0.7 per cent on upbeat earnings expectations for the year.

Additional reporting: Reuters