Global shares soared, with the European markets reaching unprecedented highs due to indications of slowing inflation bolstering the prospect of rate cuts throughout the developed world. Meanwhile, Ireland surpassed the performance of its European counterparts on Friday, with the Iseq recording a 0.75% increase at market close.
From a banking viewpoint, certain Irish financial institutions had a successful day, although this was not an industry-wide trend, as illustrated by Permanent TSB’s low finish on Friday. AIB experienced a surge of 1.9%, closing at €5.44 per share and was one of the leading contributors in the Irish market, in conjunction with Bank of Ireland, which also marked an increase of 1%. That morning, the Irish government declared a reduction in their stake in AIB to marginally beneath 25%, potentially influencing the day’s outcome. However, Permanent TSB witnessed a drop of 3.6%, ending the day at €1.60.
There was a 1% increase for Ryanair, whose shares finalised at €15.94, while Glanbia also experienced a near 1% rise, ending at €16. Kerry Group saw a 1% rise to €90.80 per share. Additionally, the travel and leisure industry had a good day, with Dalata rising by 1.6%, ending at €4.40.
On the larger European scale, the Stoxx 600 Index rose by 0.4% to 526.66, culminating in a weekly increase of 1.6%. This marks the index’s four consecutive weeks of gains, the most extended streak since March. Investors have become more assured about the European Central Bank’s plans to drop rates and the continued growth of the global economy.
Euro zone economic data revealed on Friday showed a 2.2% yearly increase in consumer prices in August, a significant deceleration compared to July’s 2.6% increase. Such favourable inflation rates will contribute to the positive mood noted at last week’s Federal Reserve’s annual Jackson Hole meeting. Here, Jerome Powell, along with officials from the ECB and the Bank of England, heavily suggested a potential drop in interest rates. Consequently, inflation levels in the euro zone fell to a three-year low in August, paving the way for a potential rate cut from the European Central Bank in the coming month.
On Friday, the UK’s premier stock index, the FTSE 100, marked over three months of high performance. It was spearheaded by a rise in real estate stocks, buoyed by anticipation of a potential reduction in interest rates. However, the energy sector witnessed a fall due to worries over demand, which limited the daily profits. The FTSE 100 ended the day on par, but managed to secure its second consecutive monthly increase and a third weekly jump in a row.
Meanwhile, the FTSE 250, representative of mid-cap British firms, appreciated by 0.3%, although it showed a decline over the week and month. In the US, July’s Personal Consumption Expenditure index, the preferred inflation measure of the Federal Reserve, came at 2.5%, slightly lower than the 2.6% predicted by Reuters’ economist poll.
In New York, indices such as Nasdaq and the S&P 500 enjoyed slight ascents amidst fluctuating trading on the eve of the extended weekend. This came in the wake of indications of mitigating price pressures, affirming the speculation of an impending interest rate cut at the forthcoming Federal Reserve meeting in September.
The Personal Consumption Expenditure index exhibited a rise of 2.5% annually, somewhat lower than the 2.6% anticipated by economists surveyed by Reuters, and increased 0.2% monthly as forecasted. Among the leading corporations sensitive to rate changes, Amazon.com and Microsoft saw growths of 1.3% and 0.7% respectively. Chip stocks also saw an upliftment; with Broadcom inflating by 3.4% and Advanced Micro Devices up by 1.4% assisting the Philadelphia SE Semiconductor index to ascend by 2.2%.
Furthermore, the recent PCE report, released before the Federal Reserve’s September meeting, reflects Federal Reserve Chair Jerome Powell’s remarks from the previous week, which suggested a forthcoming policy shift. Subsequent data provided by Reuters.