Markets

European stocks gain amid hopes for peace talks and Chinese stimulus

US shares rise ahead of interest rate increase by Federal Reserve

Traders work on the floor of the New York Stock Exchange. Photograph: Michael Nagle/Bloomberg

Wed Mar 16 2022 - 18:42

European stocks closed at over two-week highs on Wednesday after fresh talks of compromise from Russia and Ukraine boosted gains spurred by China's promise to roll out more economic stimulus measures.

Moscow and Kyiv discussed a status for Ukraine outside Nato, lifting hopes for a breakthrough after three weeks of war.

US stocks also gained ahead of the Federal Reserve’s move to increase interest rates by a quarter of a percentage point, confirmed at 6pm Irish time after the close of European markets.

DUBLIN

The Iseq rose 3.85 per cent as stocks climbed across Europe. Irish bank shares joined in the gains for financial stocks, with AIB advancing 5.4 per cent to €2.01 and Bank of Ireland finishing up almost 5.2 per cent at €5.99.

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CRH rose 2.4 per cent to €39.96 as analysts at Cantor Fitzgerald Ireland concluded the building materials group may have more than $12 billion (€10.9bn) on deals after the completion of the sale of its North American glass building products unit.

Other strong gainers on the day included Glanbia, which rose 4.7 per cent to €11.07, food group Kerry, which added 4.3 per cent to €100.60, and Flutter Entertainment, which closed up 5.5 per cent at €110.50.

It was also a good day for Ryanair, which soared 4.4 per cent to €14.48, and Smurfit Kappa, which closed up 4.8 per cent at €40.57.

LONDON

The FTSE 100 climbed 1.6 per cent, nearing a two-week high, with base metal miners and banks leading the gains. The domestically focused mid-cap FTSE 250 index advanced 3.2 per cent.

Avast fell 13.3 per cent after Britain's anti-trust regulator launched an indepth probe into US cybersecurity firm NortonLifeLock's $8.6 billion purchase of the company.

Defence company BAE Systems fell 3.6 per cent on hopes around the Russia-Ukraine peace talks, after rising nearly 28.4 per cent so far this year.

IG Group shed 0.8 per cent after the online trading platform forecast full-year revenue to "moderately" exceed expectations, as the Ukraine crisis increases market volatility, but it predicted slower growth on its US platform.

EUROPE

The pan-European Stoxx 600 index closed up 3.1 per cent at its highest level since February 28th.

Dutch tech investor Prosus, which has a huge stake in China's Tencent, surged nearly 23.9 per cent after hitting all-time lows in the previous session. The stock led the wider technology index surging nearly 6.6 per cent.

Other China-exposed sectors rose. Luxury stocks LVMH, Richemont and Hermes, also reliant on China for a large part of their revenue, gained between 4.8 per cent and 7.8 per cent.

Among other stocks, Sweden-based private equity fund EQT jumped 11.9 per cent after it said it had agreed to buy investment firm Baring Private Equity Asia (BPEA) in a deal worth €6.8 billion.

German carmaker BMW gained 4.1 per cent despite lowering its profit margin expectations for its automotive segment for 2022 due to the war in Ukraine.

US

Wall Street's main indexes jumped in early trading, propelled by technology and financial stocks, as signs of progress in Ukraine-Russia peace talks lifted sentiment ahead of the widely expected interest rate hike by the Federal Reserve.

Megacap names Apple and Microsoft rose 1.8 per cent and 1.5 per cent respectively, powering the S&P 500 and the Nasdaq higher.

Big banks advanced 3 per cent in anticipation of the first rate increase since 2018. Morgan Stanley led the gains with a 6.1 per cent jump.

US-listed shares of Baidu, Alibaba Group, JD.com and Tencent Music surged as China's securities regulator also said it would strive to reach an agreement on China-US audit supervision cooperation.

Kohl's gained 13.4 per cent after Axios reported Hudson's Bay is considering a bid for the US department store operator. – Additional reporting: Reuters

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