European shares edge higher ahead of Federal Reserve decision

European shares climbed on Wednesday, a day after their biggest fall in a month, as speculation mounted that the US Federal Reserve might deliver its last interest rate hike in the current cycle of increases.

Elsewhere, however, energy stocks extended their declines as crude oil prices fell once more.

Dublin

The Iseq index finished down 0.8 per cent, with the Dublin market unable to join in the broader rise for European stocks. The market was dragged into the red by a 1.3 per cent decline for Ryanair, which closed at a price of €14.91, as well as a 1.3 per cent drop for Flutter Entertainment.

The Paddy Power owner saw its share price fall to €177.40 on its Dublin listing despite reporting that it had held on to new customers who bet on the football World Cup late last year.

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Building materials group CRH rose 0.5 per cent to €43.44 and packaging company Smurfit Kappa added 1.3 per cent to €33.40, but food group Kerry edged down 0.2 per cent to €94.50.

London

The FTSE 100 edged up 0.2 per cent as investors awaited the decision of the Fed, while the domestically focused mid-cap FTSE 250 index finished 0.3 per cent higher. Among oil majors, BP fell 0.3 per cent, while Shell dropped 0.7 per cent.

British education group Pearson jumped 10.1 per cent, after plunging nearly 15 per cent in the last session, as analysts at BofA Global Research double upgraded its stock to “buy” from “underperform”.

Lloyds Banking Group fell 3.6 per cent despite beating forecasts with a 46 per cent jump in its pretax profit in the first quarter, after the lender warned that it had seen “modest” increases in borrowers falling into arrears and defaulting on loans.

Aston Martin lost 3.7 per cent after the luxury carmaker affirmed its 2023 outlook.

Europe

The pan-European Stoxx 600 index ended up 0.3 per cent, having closed at its lowest level in one month on Tuesday. In Frankfurt, the Dax added 0.6 per cent, while the Cac 40 finished 0.3 per cent higher in Paris.

The oil and gas sector dropped 0.8 per cent as crude prices continued to fall on worries about the health of the US economy and its impact on demand.

Among stocks, Stellantis, the world’s third-largest carmaker by sales, fell 1.9 per cent after it sounded cautious on the rest of the year, with its vehicle inventories growing.

Italy’s UniCredit gained 3.8 per cent as the lender raised its financial targets for the year after it posted stronger-than-expected first-quarter earnings.

Deutsche Post added 1.1 per cent after the German logistics company reported first-quarter operating profit above expectations.

Signify, the world’s biggest lighting maker, dropped 9.1 per cent on missing quarterly core profit expectations, while Deutsche Lufthansa fell 1.3 per cent after it reported revenue below market expectations.

New York

Wall Street’s main indexes were muted in early trading as investors steered clear of big bets ahead of the Federal Reserve’s policy decision later in the day, while regional banks took a breather after a steep sell-off in the previous session.

Regional lender PacWest Bancorp, one of the worst-hit stocks in the previous session, gained 4.1 per cent on Wednesday, while the KBW Regional Banking index advanced 1.4 per cent.

Eli Lilly gained 4.9 per cent to hit a record high as the company’s experimental Alzheimer’s drug slowed cognitive decline by 35 per cent in a closely watched late-stage trial.

Advanced Micro Devices slumped 8.3 per cent after the chipmaker forecast quarterly sales below estimates due to a weak PC market, pushing rival Intel up 2.2 per cent.

Estée Lauder slid 16.9 per cent as the MAC lipstick maker forecast a bigger drop in full-year sales and profit. – Additional reporting: Reuters