On Tuesday, European stock markets experienced an over one-month surge, attributable to positive earnings from numerous companies, notably the banking industry, combined with the optimistic mood stemming from reductions in interest rates.
In Ireland, the Iseq index experienced a marginal growth of 0.3%, trailing behind its European counterparts due to a significant plunge in Ryanair’s shares. The airline’s stocks closed the day 5.6% down at €19.11 after CEO Michael O’Leary predicted lower than anticipated summer ticket prices amidst the widespread grounding of planes and a backlog in the supply chain. O’Leary expressed surprise that despite a large number of the Airbus fleet being grounded for maintenance, pricing is expected to increase by up to 5% instead of the previously projected 5-10%.
Notwithstanding the setback by Ryanair, the Euronext Dublin, as the Irish market is known, mostly recorded growth, significantly influenced by the main banks, which mirrored similar rises by European lenders. The Bank of Ireland experienced a growth of over 6% to €10.73 per share, and AIB grew almost 4% to close at €5.14 per share. On the other hand, PTSB declined 2% to €1.47 per share, with its first-quarter trading update set for Wednesday morning.
In an unpredictable trading day, shares for cardboard box manufacturer Smurfit Kappa increased by 0.8% to close at €43.78 per share amid rumours of a $15 billion (€13.9 billion) bid for its competitor, International Paper by Brazil’s Suzano.
Meanwhile, in London, the FTSE 100 index reached an all-time high on Tuesday, having benefited from an extended weekend, thanks to Shell’s proposed sale of some Malaysian assets. However, BP experienced a dip following a shortfall in its earnings forecast. The FTSE 250, predominantly of mid-cap companies, also benefitted, recording a 1.3% gain.
Shell saw a 1.3% increase as it was reported by Reuters to be negotiating with Aramco from Saudi Arabia for the sale of its petrol station enterprise in Malaysia. This comes one day post the announcement of their departure from the downstream businesses in South Africa. BP, by contrast, saw a 1.3% dip after falling short of predictions stemming from lower oil and gas prices and an outage at a US refinery, whilst continuing with their share buyback scheme.
Investments in precious metal mining rose 2.1% due to the surge of safe-haven asset demand in response to the uncertainty of the Gaza ceasefire. Additionally, surveys indicate a decrease in consumer spending in the UK during April, causing a shift in focus to the interest rate decision of the Bank of England later in the week.
European stocks are faring well, with the Stoxx 600 Index and blue-chip Stoxx 50 up by 1.1% and 1.2% respectively. This comes after closing at a high for the past week and is spurred by increased speculation of rate cuts by Federal Reserve and European Central Bank this year.
UBS saw an 8.4% rise after the banking institution’s first quarterly profit, post the takeover of Credit Suisse, tripled analyst predictions. The financial services index rose 2.1% to a three-week high, leading the way in sectoral advances.
Shares of chip manufacturer Infineon rose by 12.6% after second-quarter sales exceeded estimations. Analysts predict a long-term growth despite a reduction in full-year guidance. French spirits manufacturers Remy Cointreau and Pernod Ricard saw a rise of 5.6% and 2.7% respectively after Chinese President Xi Jinping expressed openness towards a trade conflict over French cognac.
US markets remained steady with stocks near their highest in about a month. In New York, Nasdaq Composite, Dow Jones Industrial Average, and S&P 500 indices saw an increase of around 0.2% in early afternoon trade. Following news of potential private equity buyouts reported by CNBC, fitness firm Peloton saw a boost, while Walt Disney shares suffered due to a pessimistic subscriber outlook. Apple stocks remained buoyant after introducing a larger version of the iPad Air.
Traders maintained their focus on the “Fedspeak”, post the officials’ decision last week to hold interest rates steady at their peak since 2001. Further information was provided by Reuters and Bloomberg.