Surprise UK interest rate rise drives bank shares

European shares had their best day in more than a week on Thursday, led by gains in banks and miners after the European Central Bank promised continued support to the economy, still choosing to incrementally withdraw stimulus.

In the United States, the Dow climbed after the Federal Reserve’s announcement of a faster end to its pandemic-era stimulus pushed investors towards more economically sensitive sectors, while a fall in technology stocks hurt the Nasdaq and the S&P 500.

Dublin

The Iseq closed ahead by more than 0.8 per cent, as banks led the way on the back of a rates rise in the UK. Bank of Ireland ended the session up almost 4.4 per cent to €5.06 per share. AIB was up 2.3 per cent to €2.18.

Irish Continental Group, owner of Irish Ferries, charted a steady course despite the Omicron waves roiling the travel sector. It was up more than 1.1 per cent to €4.41. Ryanair was also ahead by 1.1 per cent to €14.16.

World stocks rally stalls at two-week highs

---

Trafigura hands more than $1bn to top executives and staff

---

European shares surge ahead of ECB outcome

---

Sterling hits new 2021 lows on Covid restriction reports

---

London

Shares in British banks rallied, lifting the blue-chip FTSE 100 after the Bank of England (BoE) stunned investors with an interest rate hike, the world’s first major central bank to do so since the pandemic hit the global economy last year.

The FTSE 100 gained 1.3 per cent, breaking a six-day slump, while the banks index jumped 3.7 per cent after the BoE raised its main interest rate to 0.25 per cent from 0.1 per cent as it said inflation was likely to hit 6 per cent in April – three times its target level.

Shares in Lloyds Banking Group, Barclays, Standard Chartered and HSBC jumped between 3.8 per cent and 4.6 per cent, topping gains on the blue-chip index.

Domino’s Pizza Group jumped to the top of the mid-cap FTSE 250 index after raising its medium-term sales forecast and saying it had reached an agreement with its franchisees over commercial terms for profit-sharing.

Online fashion retailer Boohoo, run by Irishman John Lyttle, plunged 23.1 per cent after warning that expectations for its 2021-2022 year will be lower than previously guided, blaming higher returns, delivery disruptions and pandemic-related cost inflation.

Europe

The pan-European Stoxx 600 index rose 1.2 per cent, while the euro-zone index closed up 0.9 per cent. In Germany the Dax closed up 1 per cent and Paris’s Cac 40 rose 1.1 per cent.

Airbus rose 2.4 per cent after Australia's Qantas Airways chose the planemaker as its preferred supplier for its domestic fleet and Air France KLM struck a deal for dozens of narrow-body jets.

French power giant EDF plunged 15.5 per cent after it found faults at a nuclear power station and shut down another plant using the same kind of reactors.

German-listed shares of Austrian IT company S&T dropped as much as 34 per cent after it said it would look into allegations in a report by activist investor Viceroy Research.

New York

Nine of the 11 major S&P 500 sector indexes were higher, with economy-focused financials, energy and materials leading gains, while the S&P 500 banks index added 2.5 per cent. Tech and consumer discretionary, the sectors housing most mega-cap growth stocks, declined.

The Nasdaq index was pressured by declines in shares of Apple, Tesla, Amazon. com and Microsoft and fell between 2.0 per cent and 4.4 per cent.

Lennar Corp fell 2.7 per cent after the homebuilder missed analysts' estimates for quarterly profit as pandemic-led supply chain issues pushed lumber costs higher and delayed house deliveries.

Delta Air Lines fell more than 1.2 per cent even as it projected it would report a profit this quarter, citing strong demand for travel and a decline in fuel prices.

Adobe forecast revenue for the first fiscal quarter and full year 2022 that fell short of analysts' estimates. It was down 11 per cent by the afternoon session. – Additional reporting: Reuters/PA/Bloomberg