European shares touch new record highs as retail stocks jump

European shares touched new record highs on Wednesday, boosted by upbeat corporate updates from retail stocks and the utilities sector. The advance was partially offset, however, by losses among automotive stocks.

Upbeat corporate updates have fostered a risk-on sentiment among European investors, reflecting confidence in the economy. Expectations of an interest-rate cut from the Federal Reserve and the European Central Bank in June have also helped stocks rally.

Dublin

The Iseq fell 0.5 per cent, underperforming the mostly positive or flat trend across Europe, as the Dublin market was weighed down by a 1 per cent fall for both Ryanair and Kerry. The airline closed down at €19.88, while the food group finished at €81.28. Insulation-maker Kingspan also declined, dropping 0.6 per cent to €83.20.

Glanbia was among the climbers, however, adding 0.6 per cent to close at €17.50, while packaging group Smurfit Kappa also helped limit losses on the market, rising 0.6 per cent to €40.20.

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London

The FTSE 100 closed up 0.3 per cent, notching up a new nine-month high after data showed the local economy returned to growth at the start of 2024. The mid-cap FTSE 250 ended flat, as insurance firm Direct Line weighed on the index.

Shell gained 1.2 per cent after a report said the oil giant is planning to cut at least 20 per cent of jobs in its deals team. The broader energy sector also advanced 1.4 per cent, tracking an uptick in crude prices.

The nonlife insurance sector lost 2 per cent, bogged down by a 4.3 per cent drop in Direct Line after it rejected a revised buyout offer from Belgian rival Ageas.

Glencore climbed 4.8 per cent after analysts at Deutsche Bank upgraded the mining stock to “buy” from “hold”.

Europe

The pan-European Stoxx 600 ended up 0.2 per cent. The index earlier in the session hit an all-time high for the fifth time in the past six sessions.

The retail index emerged as the top sectoral performer, adding 3.4 per cent on the back of a 18.9 per cent jump in Zalando. The online fashion retailer forecast a return to growth this year and said it would buy back up to €100 million of shares. Zara-owner Inditex saw its shares hit a record high, with the Spanish stock ending up 7.7 per cent after it reported positive early spring sales.

Shares in E.ON climbed 6 per cent as Europe’s largest operator of energy networks increased its five-year investment target to €42 billion and provided 2024 profit guidance that beat expectations.

Volkswagen slipped 5.9 per cent after forecasting a 3 per cent rise in its car sales this year, a growth rate down sharply from 2023 amid a gloomy economic outlook.

Adidas posted its first loss in over 30 years in 2023, but its shares reversed course from early declines to close up 3.8 per cent.

US

The tech-laden Nasdaq fell on Wednesday as rising US Treasury yields hit market-moving growth stocks, while investors awaited more data this week for clues on the timing of the Federal Reserve’s interest-rate cuts.

The yield on treasury notes ticked higher across the board, pressuring rate-sensitive megacaps such as Nvidia, Meta Platforms and Apple, which fell between 3.1 per cent and 0.9 per cent.

Chip stocks such as Advanced Micro Devices and Micron Technology fell more than 4 per cent each, steering a 2.6 per cent decline in the Philadelphia SE Semiconductor Index.

McDonald’s fell 3 per cent after its chief financial officer said the fast-food giant’s international sales could fall sequentially in the current quarter, pressured by the conflict in the Middle East and demand weakness in China.

Intel eased 2.7 per cent after a report said the Pentagon had pulled out of a plan to spend as much as $2.5 billion on a chip grant to the company. – Additional reporting: Reuters

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