Business

European markets finish in positive territory following ECB rate cut

No indication about future moves were given by the central bank even as money markets expect three further reductions through March 2025

Traders at the New York Stock Exchange. Photograph: Getty
Traders at the New York Stock Exchange. Photograph: Getty
Fiona Keeley
Thu Oct 17 2024 - 18:27

European stocks extended their gains as the European Central Bank (ECB) delivered a second-consecutive rate cut, and the technology sector stabilised after two days of losses. The Stoxx Europe 600 Index ended the session 0.8 per cent higher, the most in three weeks, with the majority of sectors advancing.

Dublin

Dalata Hotels rose 1.19 per cent finishing at €4.25 a share. Ryanair rose 0.55 per cent to €17.48. Kingspan finished up 0.91 per cent at €83.30. In banking, AIB dropped 0.16 per cent to €4.93; Bank of Ireland fell marginally by 0.07 to €8.93 and Permanent TSB rose 0.91 per cent to €1.65 a share.

Origin Enterprises rose 1.54 per cent to €3.30. Food group Glanbia rose 0.77 per cent to €15.77 a share. Kerry Group dropped 0.16 per cent to €94.35. Housebuilder Cairn Homes rose 0.48 per cent to €2.11.

London

London’s FTSE 100 hit a five-month high after a second day of gains, as euro zone interest rates were cut for the second time in a row. The index rose 0.67 per cent, marking the highest closing level since May 2021.

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In company news, Simply Be and JD Williams fashion retailer N Brown said it has agreed to a takeover by Joshua Alliance, whose family built up the group in the 1960s.

Mr Alliance said the fashion firm would be better off in private hands as, due to its current shareholder ownership, it is “not benefiting from being listed on the AIM market, whilst having to bear significant costs associated with its listing”.

Shares in N Brown soared by 43.3 per cent at the close as investors cashed in before the acquisition is finalised.

Rentokil also made strong gains on Thursday after the pest control business reported rising sales and said it was making progress with efforts to trim its cost base.

The company leapt to the top of the Ftse 100 after telling investors it was “taking action to mitigate cost overruns”, including reducing its headcount and more tightly managing overtime and staffing.

Shares in Rentokil closed 8.7 per cent higher.

Europe

European stocks closed less than 1 per cent away from record high levels on Thursday after the ECB delivered its widely expected 0.25 per cent cut, even though it refrained from offering new clues about its next move.

The continentwide Stoxx 600 index ended higher by 0.8 per cent, following a two-day decline. Most major markets, including France and Italy, trended higher. Germany’s Dax closed at an all-time high, up 0.77 per cent.

Despite Thursday’s cut, the ECB did not provide any indication about future moves in its statement and instead repeated its mantra that decisions will be data-dependent.

This came in the face of money markets’s expectations of three further reductions through March 2025. Inflation in the euro zone is now increasingly under control and the economic outlook has worsened.

Defence stocks led sectoral gains with a 2.6 per cent jump, while cyclicals such as financial services, banks and industrial goods were among top performers.

New York

Wall Street rose on Thursday, with the S&P 500 and the Dow briefly reaching record highs, as chip stocks surged on TSMC’s upbeat forecast and stronger-than-expected monthly retail sales indicated a robust US consumer.

Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker, beat market estimates for profit and forecast a jump in fourth-quarter revenue, driven by demand for artificial intelligence chips.

The chipmaker’s US-listed shares soared 12.2 per cent, while AI-trade favourite and TSMC customer Nvidia gained 3 per cent, touching a record high.

The optimism spread to other chip stocks, sending the broader Philadelphia SE Semiconductor index 2.4 per cent higher.

Meanwhile, US retail sales increased 0.4 per cent in September, slightly more than expected, while weekly jobless claims fell unexpectedly.

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