On Wednesday, European stocks demonstrated an upward trend, mainly propelled by real estate equities which saw a significant performance amongst the general gains. Investors had an opportunity to reflect more on the comments by Jerome Powell, chair of the U.S. Federal Reserve, in his second session of delivering his testimony. On this occasion, the Stoxx 600, a European index, showed a rise of 0.9 per cent, with real estate equities contributing a boost of 2.1 per cent.
In his second round of congressional testimony, Powell expressed that he was not firmly convinced that inflation would remain sustainably under 2 per cent, though he noted he had “some confidence” in this aspect. Currently, market players are steadily anticipating the release of June inflation figures from both the U.S. and Germany set to be announced on Thursday. This data will likely affect the prediction of prospective interest rate reductions.
The Iseq All Share index, in Ireland, showed an increase of 0.7 per cent, achieving 9,691.31, with real estate shares following the positive trend across the continent. Among the performers, Cairn Homes recorded a 3.1 per cent leap to €1.87. Glenveagh Properties also experienced a 2.3 per cent growth at €1.35. However, HostelWorld saw a decline of 5 per cent to €1.90 due to a lukewarm response from investors to the company’s trading update. Despite this, the hostel booking company’s stock has risen by 44 per cent over the last year. The banking sector generally saw an upward movement. In this sector, AIB and the Bank of Ireland rose by 0.6 per cent (equating to €5.22) and 0.9 per cent (to €10.15) respectively, whilst PTSB remained steady at €1.32.
In the UK, stocks concluded with a rise, with the FTSE 100 up by 0.7 per cent, aided by an improved performance by precious metal miners. This was also influenced by the UK’s central bank’s chief economist, Huw Pill, who offered tough comments that eased the possibility of an interest rate cut in August. Grafton Group, listed in London but based in Dublin, saw a 3.5 per cent improvement, displaying confidence in its future despite acknowledging persisting challenging trading conditions. Solid gold prices brought about an increase of 3.2 per cent by precious metal miners. Travis Perkins, a construction company, surged ahead by 7.1 per cent following the announcement of Pete Redfern as the upcoming Chief Executive.
International Airlines Group (IAG), the parent company of Aer Lingus, saw a 3 per cent increase after an upgrade to ‘buy’ status according to Morgan Stanley. European stocks also saw a rise, specifically French shares, which rose by almost 0.9 per cent amidst the domestic political turmoil that followed Sunday’s elections.
Government bonds in the eurozone appeared to benefit as yields fell – an indication of investors’ reassessment of political uncertainties following France’s parliamentary runoff vote. Meanwhile, analysts from Deutsche Bank anticipate a marginal increase in sales and earnings for Q2, which would be a first since Q1 2023.
In other business news, Norwegian defence and aerospace corporation, Kongsberg Gruppen, saw a remarkable 11 per cent increase, coming atop of the benchmark index due to strong revenue growth, enhanced margins, and an increased order backlog in Q2. Spain’s grid operator, Enagas, saw its share prices rise by 6.2 per cent after agreeing to sell its 30.2 per cent stake in Tallgrass Energy to American investment giant, Blackstone, for a sum of $1.1 billion or €1.02 billion.
In New York, Wall Street was witnessing strong performances in the early afternoon as the Nasdaq and S&P 500 reached record highs, bolstered by the performance of Nvidia and other large stocks. Hopes remain high for positive inflation data and Q2 earnings to be released later in the week.
Alphabet, Microsoft, and Apple also performed well, but some market observers are calling for greater diversification due to the narrow foundation for Wall Street’s rally this year. In less positive news, TurboTax owner Intuit has announced it will be laying off approximately 10 per cent of its workforce. Illumina, a gene-sequencing equipment business, saw its shares rise by 4.9 per cent after revealing plans to purchase private firm Fluent BioSciences. Reuters contributed to the reporting of this news piece.