Markets a sea of green as US inflation cools

European shares extended gains on Wednesday as further evidence of easing consumer inflation in the US boosted hopes that the Federal Reserve could end its market-punishing interest rate hikes soon.

The US consumer price index rose 3 per cent last month from a year ago, the smallest advance in more than two years, according to data out Wednesday from the Bureau of Labor Statistics. Excluding food and energy, the core CPI – which economists view as the better indicator of underlying inflation – advanced 4.8 per cent, also the lowest since 2021.

Dublin

Another strong day for Irish shares saw the Iseq index rise 1.2 per cent on Wednesday, following up Tuesday’s 2.2 per cent gain. It was “more or less a sea of green” in Dublin, traders said, with strongly positive moves from some of the biggest names on the bourse.

Shares in Smurfit Kappa jumped 4.5 per cent to €32.93 as investors continued to build position in advance of the release of the cardboard box-maker’s half-year results on August 2nd.

Bonds are back: but should you invest?

---

CRH puts its hands up over shortcomings on investor dividends

---

Will inheritance cause a problem with my weekly disability payment?

---

High rollers face pension squeeze

---

Kingspan carried forward Tuesday’s momentum after a surprise trading update forecast record profits this year. The insulation giant added another 3.2 per cent to close the session at €68.44 per share.

Ryanair, however, shed 1.5 per cent to €16.64 per share after analysts downgraded their outlook for the broader airline sector.

London

British banks helped propel the benchmark FTSE 100 index to a 1.9 per cent advance on Wednesday after the Bank of England concluded that the country’s top eight lenders are sufficiently resilient to withstand a severe economic downturn. The mid-cap FTSE 250, meanwhile, was ahead by more than 2.4 per cent on the session.

Shares in Lloyds, Barclays, NatWest and HSBC rose between 1.9 per cent and 3.4 per cent after the lenders passed the central bank’s latest stress test. Virgin Money was among top gainers on both the mid-cap index and the pan-Europe Stoxx 600, adding more than 10 per cent.

However, miners were the biggest sectoral gainers, climbing as metal prices advanced against a weak dollar. Shares in Antofagasta, Glencore and Rio Tinto all climbed.

Europe

Buoyed by cooler than expected US inflation data, Europe’s main indices continued to gain momentum. The blue-chip Stoxx 50 added more than 1.7 per cent. while the cross-continent Stoxx 600 was up by 1.5 per cent.

Semiconductor firms, including Aixtron, ASM International and Infineon, rose between 4 per cent and 6 per cent after Jefferies raised price targets on the stocks.

Thales rose 3.7 per cent after the French defence group said it had initiated talks to buy supplier Cobham Aerospace Communications for almost €1 billion.

At the bottom of the Stoxx 600 Air France-KLM shares fell 4.8 per cent after Deutsche Bank cut the stock to “hold” from “buy”.

New York

Wall Street’s main indices were on course for gains by closing bell in Dublin as investors cheered the latest US inflation data. The Dow Jones Industrial Average rose 0.8 per cent, the S&P 500 gained 1.05 per cent and the Nasdaq Composite added 1.4 per cent.

Megacap growth and technology stocks such as Microsoft, Amazon and Tesla added between 1.2 per cent and 1.6 per cent.

Ten of the 11 major S&P 500 sectors advanced, led by gains in consumer discretionary stocks that added 1.1 per cent in early trading.

Nvidia added 2 per cent after the Financial Times reported that chip designer Arm is in talks to bring the megacap firm in as an anchor investor in advance of its planned listing.

Cisco Systems shed 0.6 per cent as Bank of America downgraded the networking equipment maker’s rating.

Major banks will kick off the earnings season later this week, with JPMorgan Chase, Wells Fargo and Citigroup reporting results on Friday. The results from US banks are unlikely to provide clarity on areas of uncertainty, although there could be the first signs of a trough in net interest margin, Citigroup wrote in a note downgrading JPMorgan to neutral. – Additional reporting: Reuters, Bloomberg