European shares saw a considerable surge on Thursday, with particularly strong showings from sectors associated with China like the luxury goods and mining industries. This growth comes on the heels of news of China’s ambitious economic boost strategy. In addition, shares of semiconductor-based companies also saw an uptick, propelled by United States company Micron’s favourable revenue estimates.
The Stoxx 600 index, a benchmark for European shares, hit an unprecedented closing figure.
In a response to recent challenges, Chinese authorities pledged to implement the “necessary fiscal spending” needed to achieve the year’s economic growth aim of around 5 per cent. This promise has led markets to anticipate further economic boosts on top of the stimulus package unveiled this week.
Meanwhile, Deutsche Bank anticipates an accelerated interest rate reduction cycle from the European Central Bank, predicting consecutive quarterly cuts to the interest rates, starting in December.
Irish stocks also saw considerable growth, increasing by 1.6 per cent in tandem with the wider European trend, with every one of the five most traded stocks of the day showing growth. Ryanair’s shares rose 1.1 per cent to €17.04, and it was a positive day for Irish banks. Bank of Ireland’s shares surged by 4.9 per cent to €10.78, and AIB saw an upswing of 2.5 per cent to €5.49. Other gainers of the day included Kingspan, which saw a marginal rise of 0.8 per cent to €86.95, and Kerry Group, which ended 0.5 per cent up at €93.65.
The FTSE 100, however, trailed its European counterparts with a slight increase of 0.2 per cent, due to setbacks faced by energy giants as a consequence of falling crude oil prices. This offset advantages gained from parts of the market that are heavily reliant on China following promises of more economic policy measures from Beijing.
China-linked luxury firms experienced a particularly dramatic increase in shares across Europe. Burberry of the UK gaining 8.7 per cent, while Deutsche Bank’s upgrade of Watches of Switzerland led to an 11.1 per cent surge in its shares.
Indices focused on domestic issues like the FTSE 250 midcap index also benefited from the increase, going up by 1.2 per cent.
Asia-focused banks HSBC and Standard Chartered saw growths of 2.1 and 5.3 per cent respectively, and insurance company Prudential experienced a significant 6.1 per cent surge.
Closing 1.3% above at a remarkable 525.61 points, thereby marking an all-time peak, the Stoxx 600 pan-European index remains within a slight distance of 0.2% off its maximum intraday high. With respect to luxury companies with a heavy Chinese market influence, such as LVMH and Hermes, they saw a spike of approximately 9% each. In fact, Europe’s top ten luxury companies collectively surged 6.5%. Meanwhile, with increased base metal prices, an impressive 4.3% leap was noticed in the mining stocks.
Citing a potential delisting, Swatch Group, a Swiss watchmaking brand, saw a steep jump of 12.1%. Also of note was the upward climb of 6.9% in Commerzbank of Germany, following the bank’s disclosure of its strategy for the upcoming years till 2027. In contrast, after abandoning its 2024 margin target, H&M, the globally second largest listed fashion retailer, experienced a drop of 4.6%.
In the US territory, despite fluctuating market conditions, Wall Street’s prime indexes exhibited a positive trend on Thursday. The S&P 500 reached an intraday maximum after a promising forecast from Micron resurged interest surrounding artificial intelligence technology. Concurrently, alleviation of workforce-related concerns were noted when a report revealing a decrease in jobless claims to a four month low was released.
After announcing an encouraging prediction of first-quarter revenue higher than what was anticipated, demonstrating strong demand for AI computing memory chips, Micron Technology’s shares skyrocketed 12.9%. Micron’s good news accompanied a Labor Department report, revealing a drop in jobless claims to a four-month low, and affirming a 3% second-quarter growth in the US economy.
Meanwhile, upon announcing an upgraded third-quarter revenue prediction, Southwest Airlines saw its shares soar 10.7%. Accenture also experienced a noteworthy gain of 4.5%, following its above-estimate annual revenue forecast. This report includes additional inputs from Reuters.