European shares rise as dealers look towards ECB’s next rate move

Interest rate uncertainty ensures traders remain on the edge

By lunchtime, the Dow Jones Industrial Average was down 0.15% at 33,735.23. Photograph: Spencer Platt/Getty Images

European shares ended higher on Friday as strong quarterly earnings boosted shares, but uncertainty around the outlook for US interest rates and the economy kept investors on edge.

DUBLIN

The Iseq Overal Index ended the week slightly off, underperforming its European peers for a second day. The market finished the session down a 0.25 per cent to just below 8,490. Bank shares weighed on the index, with AIB shedding some of its gains in the previous session, ending the week at €3.89 and Bank of Ireland off 0.6 per cent by the close of the day.

FBD also gave up some of the previous day’s gains, closing at €13.25.

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Building stocks were weaker over the day. CRH closed at €44.95 and Kingspan was down almost 0.5 per cent to €60.80.

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Ryanair shares also dipped lower, losing 3 cent to close at €14.81.

On the more positive side of the markets, shares in Paddy Power owner Flutter Entertainment rose 1 per cent to €179.50, while food group Glanbia gained just under 1 per cent to close the day at €13.85.

LONDON

Britain’s exporter-heavy FTSE 100 index closed higher on Friday, boosted by defensive stocks, while Network International hit nearly a two-year high after a Canadian wealth manager made a counter bid to take over the payments provider.

Shares in mid-cap Network International Holdings soared 10.3 per cent after Brookfield Asset Management made a £2.13 billion takeover offer, raising the possibility of a bidding war.

The blue-chip FTSE 100 index edged up 0.2 per cent while the mid-cap FTSE 250 slipped 0.7 per cent.

The FTSE 100 closed higher for the fifth-straight week, marking its longest streak of weekly gains in over a year despite economic data reflecting a stagnating economy and elevated inflation.

However, its gains on Friday were curtailed by industrial miners, with the sector index dropping 4.2 per cent.

Glencore lost 2.2 per cent after it became the latest among miners to report lower production for the first quarter. Earlier in the week Antofagasta also reported lower quarterly output.

EUROPE

The pan-European Stoxx 600 index rose 0.4 per cent, clocking its fifth straight week of gains.

Business software maker SAP jumped 5.2 per cent to its highest level in more than a year after reporting first-quarter revenue above analysts’ expectations and saying it plans to use generative AI in its products.

European technology stocks rose 0.9 per cent, while healthcare shares rose 1.7 per cent, with both leading sectoral gains.

EssilorLuxottica jumped 6.3 per cent, among top boosts to the blue-chip Stoxx index, after the luxury eyewear maker reported a rise in first-quarter revenue on a rebound in China-led growth.

Mercedes-Benz climbed 1.4 per cent as it reported first-quarter results above market expectations.

NEW YORK

Wall Street’s main indexes slipped on Friday as investors digested a mixed bag of earnings reports.

A survey showed US business activity accelerated to an 11-month high in April, at odds with growing signs that the economy was in danger of slipping into a recession as higher interest rates cool demand, further clouding the outlook for the Federal Reserve’s monetary policy.

US Treasury yields rose following the survey, weighing on major technology and growth stocks such as Apple, Meta Platforms and Microsoft, down between 0.2 per cent and 0.9 per cent.

Amazon.com bucked the trend with a 3.3 per cent gain, aiding a 1 per cent advance in consumer discretionary stocks.

Procter & Gamble Co climbed 3.6 per cent after the consumer company raised its full-year sales forecast on higher pricing.

By lunchtime in New York, the Dow Jones Industrial Average was down 0.15 per cent at 33,735.23, the S&P 500 was down 0.12 per cent at 4,124.77 and the Nasdaq Composite was little changed at 12,052.91.

Tesla gained 0.7 per cent after raising US prices for its Model S and X premium electric vehicles.

— Additional reporting: Reuters

(c) Copyright Thomson Reuters 2023

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist