European shares rise as drop in government bond yields offers respite

Investors awaiting key global economic data in next few days

European shares closed higher on Thursday as a drop in government bond yields offered some respite while investors awaited global data in the next few days that could offer more clues on where major central banks stand on monetary policy easing. In London stocks snapped a six-day losing streak.

Investors were also poised to digest remarks from Central Bank governor Gabriel Makhlouf and Bank of England governor Andrew Bailey later in the day, with key inflation readings from the US and euro zone due on Friday.

Dublin

The Iseq climbed 1 per cent, with the positive market sentiment resulting in gains almost right across the board. Ryanair recovered some lost ground, climbing 0.6 per cent to €17.30. The airline issued a fresh warning on Thursdays that fares on Dublin routes will soar this winter as a result of a passenger cap at the airport.

It was a positive session for Smurfit Kappa, with the packaging group rising 1.25 per cent to €45.46, while insulation-maker Kingspan added 0.8 per cent to finish at €90.40.

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AIB climbed 3.4 per cent to €5.22, while Bank of Ireland rose 1.6 per cent to €10.44.

London

The blue-chip FTSE 100 index closed 0.6 per cent higher, while the mid-cap FTSE 250 jumped 1.2 per cent, its best day in over three weeks.

Most major sectors ended the day higher, led by the personal goods sector which rose 3 per cent, followed by a 2.5 per cent rise in real estate investment trusts. Energy shares dipped 0.3 per cent, however, tracking a fall oil prices.

Auto Trader Group soared 12.9 per cent, leading gains on the FTSE 100 as the online car marketplace firm beat full-year profit estimates.

Online supermarket Ocado Group rebounded 6.5 per cent after falling over 12 per cent in the previous session when index provider LSEG said it could be moved to the mid-cap FTSE 250 index.

Europe

The pan-European Stoxx 600 index closed 0.6 per cent higher after falling in the last two sessions, hovering near a three-week low. Government bond yields in the region edged lower.

Real estate led gains across the major Stoxx 600 sectors with a 1.9 per cent jump, while telecom stocks added 1.6 per cent.

Technology shares bucked the trend to fall 0.7 per cent as German software company SAP slipped 4.1 per cent after US peer Salesforce forecast second-quarter profit and revenue below estimates due to weak client spending on its cloud and enterprise business products.

Nestle gained 3.3 per cent as traders pointed to upbeat comments from chief executive Ulf Mark Schneider.

Meanwhile, Spain’s European Union harmonised inflation rate accelerated more than expected to 3.8 per cent in the 12 months through May, from 3.4 per cent in the period through April.

US

Wall Street stock indexes fell in early trading, with a plunge in Salesforce dragging on the Dow, while data showing the economy grew slower than previously expected in the first quarter, supporting bets of interest rate cuts from the Federal Reserve this year.

Salesforce was the biggest weight on the Dow, nosediving 20 per cent after it forecast second-quarter profit and revenue below analysts’ estimates due to weak client spending on its cloud and enterprise business products.

Tesla gained 2.7 per cent after Reuters reported the company was preparing to register its full self-driving software in China.

Retailer American Eagle Outfitters dropped 6.5 per cent, posting downbeat quarterly revenue as sticky inflation hurt demand for its apparel and accessories, often sold full price.

Department-store chain Kohl’s slumped 25.2 per cent after cutting its annual sales and profit forecasts.

Additional reporting: Reuters

Laura Slattery

Laura Slattery

Laura Slattery is an Irish Times journalist writing about media, advertising and other business topics