Upbeat growth forecasts lift European stocks

Global stocks eked out gains in modest trading on Monday in advance of crucial upcoming economic data from the US this week that investors hope could ease the pressure on the Federal Reserve to continue lifting rates.

Wall Street indexes climbed as investors weighed the various potential outcomes arising from Tuesday’s US consumer price index. It is expected to show that prices rose 6.2 per cent in January, down from 6.5 per cent in December, a reading that could, however, embolden Fed policymakers in their efforts to tame still-hot inflation.

DUBLIN

In what was a positive start to the week for Irish stocks, the Iseq index gained more than 1.2 per cent on the session, outperforming many of its European peers. Traders in Dublin said that all sectors bar one were up on what was a low volume session with travel, leisure and gaming stocks leading the charge.

Ryanair, up by close to 1.8 per cent to €14.89, outdid many of its European competitors after the European Commission published new, upbeat growth forecasts for the single currency area. Hotel group Dalata led the Iseq, adding more than 3.3 per cent to €3.97 per share at closing bell.

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Paddy Power-owner Flutter added 2.6 per cent to finish at €142.70 per share.

The only sector to log losses was housebuilding with Irish names caught up in a downward move by their UK peers, traders said. Cairn Homes gave back 0.6 per cent to finish at 96c per share, as did Glenveagh, which closed at 97c.

LONDON

London’s blue-chip FTSE 100 index continued to hover near record highs, adding more than 0.7 per cent on Monday. The index is up more than 18 per cent after hitting 18-month lows last October following former UK chancellor Kwasi Kwarteng’s disastrous mini-budget.

Shares in Cineworld climbed more than 16 per cent on Monday after reports that Vue International, Europe’s largest privately-owned cinema operator, has obtained financial backing from its new shareholders as it eyes up a takeover bid for the debt-laden cinema operator.

Defence stocks also edged higher, with BAE Systems and Rolls-Royce up by between 1.7 per cent and 1.9 per cent.

British homebuilders Crest Nicholson, Taylor Wimpey, Persimmon and Barratt Developments fell between 1 per cent and 3 per cent after Deutsche Bank downgraded the stocks.

EUROPE

Optimism over European growth prospects pushed equities indexes higher, with the pan-European Stoxx 600 up more than 0.8 per cent, more than any closing gain since the start of February.

The index was lifted by construction, industrial goods and consumer stocks, while energy and real estate underperformed. It followed news that the European Commission has improved its forecasts for the bloc to 0.8 per cent, stronger than the 0.3 per cent forecast in November. It also said the region would avoid a technical recession – defined as two successive quarters of economic contraction.

In France, the Cac 40 index added more than 1.1 per cent, buoyed by L’Oreal, which continued its strong start to the year, gaining 3.2 per cent. Shares in the cosmetics giant are up close to 2 per cent after reporting strong fourth quarter sales last week.

In Germany, the Dax index climbed 0.5 per cent, pushed higher by industrials Henkel and Airbus as well as pharma giant Bayer, which all added between 1.2 per and 1.9 per cent.

NEW YORK

Traders are reassessing how high US interest rates will rise this year, with inflation and jobs data likely to still come in hot later this week. That has fuelled bets for the Fed rate to peak at 5.2 per cent in July, up from less than 5 per cent a month ago.

Consequently, US equities index saw gains on Monday, with the S&P 500 up 0.5 per cent, while the tech-heavy Nasdaq 100 advanced 0.7 per cent following its first weekly loss of 2023.

Investors piled into beaten-down megacap growth stocks, with Apple, Amazon, Alphabet and Microsoft adding between 0.7 per cent and 3.4 per cent.

Ten of the 11 major S&P 500 sectors were in the black, with the energy sector’s 1.1 per cent fall making it the sole sector lower as crude oil prices slipped on caution in advance of domestic inflation data. The likes of Marathon Oil, Valero Energy and Exxon all tumbled by between 1.6 and 1.9 per cent.

– Additional reporting: Bloomberg, Reuters, The Guardian