European shares rose on Tuesday, with large-cap pharmaceutical companies boosting the main Stoxx 600 index, while the region’s largest economy, Germany, saw a slowdown in inflation for a second month in a row in December.
In the US Wall Street’s main indexes dropped on the first trading day of 2023 due to heavy losses in Tesla and Apple, while investors awaited minutes from the last policy meeting of the US Federal Reserve for more clarity on the path of interest rate hikes.
The Iseq index outpaced its European peers, finishing the session up 2.6 per cent as it was buoyed by strong performances from its global heavy-hitters.
CRH, the building materials giant, led the way, finishing ahead by almost 4.5 per cent to €38.67. The company has signalled its intention to grow further, recently setting up an in-house venture capital unit.
The big banks also performed well as a report from Myhome.ie suggested “resilience” in the Irish housing market. Bank of Ireland was up 2.8 per cent to €9.15, while AIB was up 0.7 per cent to €3.64.
Britain’s exporter-heavy FTSE 100 jumped more than 1 per cent as energy, banking and healthcare stocks supported the index. The more domestically-focused FTSE 250 midcap index closed 1.5 per cent higher at a more than three-week peak.
Banks and pharmaceutical firms gained between 2 per cent and 2.9 per cent, while energy heavyweights Shell and BP rose 1.7 per cent each.
Cineworld climbed 0.8 per cent after the British cinema operator said it would not sell any of its assets individually, and that it had not held discussions with AMC Entertainment about the sale of any of its theatres.
Rolls-Royce soared 6.1 per cent after Jefferies raised the aeroplane engine-maker to “buy” from “hold”.
Hotel Chocolat agreed a new joint venture in Japan, months after its old project in the country collapsed. The deal with Tokyo-based Eat Creator Corporation will run 21 Hotel Chocolat-branded shops across the country. Hotel Chocolat will hold 20 per cent and get royalties. Shares closed up by 8 per cent.
The pan-regional STOXX 600 rose 1.2 per cent, closing at its highest level in nearly three weeks. In Germany the Dax index rose 0.8 per cent, while Paris’s Cac 40 closed up 0.4 per cent.
Novo Nordisk, AstraZeneca and Novartis each rose about 2.8 per cent as the European healthcare index gained 1.8 per cent. JPMorgan said it expected Europe’s pharmaceutical and biotechnology sector to maintain its lofty premium, at least during the period of recessionary concerns, and named Novo Nordisk and AstraZeneca as its top picks, while upgrading Novartis.
Deutsche Bank rose 1.6 per cent on a report it is on track with restructuring targets and will retain its forecasts until 2025 despite risks from the Ukraine war, aggressive inflation and recession.
Germany’s Brenntag gained 4.8 per cent after the chemicals distributor said it was ending talks over a possible takeover of smaller US rival Univar Solutions.
The electric vehicle-maker Tesla fell 13.7 per cent after missing Wall Street estimates for quarterly deliveries.
iPhone maker Apple dropped 3.9 per cent to its lowest since June 2021 following a rating downgrade due to production cuts in China.
Consumer discretionary and technology stocks slipped more than 1 per cent each.
The energy sector, which logged stellar gains in 2022, slid 2.7 per cent, tracking lower oil prices on bleak business activity data from China and concerns about the outlook for the global economy amid recession worries..
Other rate-sensitive technology and growth stocks such as Alphabet, Meta Platforms and Amazon were up between 0.9 per cent and 2.9 per cent.
US-listed Chinese firms such as Alibaba, JD.com and Pinduoduo rose between 1 per cent and 4 per cent on post-Covid recovery hopes. (Additional reporting: Reuters/PA)