On Thursday, European stocks witnessed a surge as strong corporate results poured in from firms such as ABB, a Swiss engineering company, and Bankinter, a Spanish bank. The Stoxx 600 index, which spans across Europe, ended the day with a 0.3 per cent increase, reflecting the momentum of the earnings season.
Specifically, the Dublin-based Iseq All-Share index experienced a 1.2 per cent uplift to 9,941.69. Banking stocks saw a spike in demand as investors absorbed Bankinter’s promising prediction for lending income, backed by its impressive first-quarter performance. AIB saw a 1.4 per cent rise, Bank Of Ireland surged by 3.6 per cent to €10.02, and PTSB skyrocketed almost 4 per cent to €1.58.
Further in Ireland, Ryanair’s shares went up by 1.5 per cent to €20.55, following the announcement of EasyJet about better winter performance due to growing demand and promising summer bookings. Greencoat Renewables climbed 2.8 per cent to 85½ cents after the data centres firm Keppel DC Reit announced a power purchase agreement with the company.
Meanwhile, in London, UK stocks bounced back for the second consecutive day, underpinned by favourable corporate reports. The pound’s standing against the dollar also strengthened as traders’ anticipation of an imminent rate cut by the Bank of England subsided. The day witnessed FTSE 100, the benchmark index, growing by 0.4 per cent. The FTSE 250 midcap index recovered from its five-day decline with a 0.6 per cent increase, mainly spurred by a startling 30.5 per cent jump in Hipgnosis Songs Fund following news of its acquisition by Concord Chorus for €1.3 billion.
Bank of England policymaker Megan Greene opined that the prevalent wage growth and services price inflation rates in Britain are too high for a potential interest rate cut. Furthermore, EasyJet’s shares ascended 2.3 per cent owing to its positive future outlook. Investment platform analyst Adam Vettese added that despite weather-related disruption to Middle East flights, boosted by Easter travels, the winter update wasn’t as bleak as expected.
National Grid, a prominent player in the utility sector, saw a 1.7 per cent surge in its shares after upgrading its profit forecast for 2023-24. Deliveroo, the popular meal delivery service, likewise enjoyed a 4.5 per cent rise in shares as it reported growth in orders in Q1. However, Rentokil shares plummeted by 7.6 per cent following the pest control firm’s Q1 trading updates.
In Europe, ABB recorded a 6.3 per cent rise in shares thanks to a better-than-expected Q1 profit and prospects of accelerated growth in coming months. The telecom industry benefited from a 6.7 per cent surge in Tele2 shares, attributed to encouraging Q1 revenues and earnings data. In the banking sector, Bankinter saw its shares go up by 5.3 per cent, while shares of Portuguese bank Millennium bcp rose 6 per cent on news of resuming dividends after a one-year break.
The European Central Bank confirmed impending interest rate cuts in June, though debating on subsequent action and the potential negative interest rate limit persisted. Swedish investment company EQT’s shares fell by 5.9 per cent after the firm posted disappointing Q1 results and anticipated continued fundraising until 2024 at least.
Across the Atlantic in early afternoon trade, US stocks were thriving as investors navigated the intense tug of war between a booming economy and the Federal Reserve’s limiting policies. According to New York Fed President John Williams, the strong economy does not justify currently cutting the policy rate. This viewpoint was mirrored on Tuesday by Jerome Powell, Fed Chairman, who didn’t provide clear guidance on potential rate reductions.
Shares of tech behemoth Meta Platforms were in demand as Bernstein raised its price target for the sixth time this week. The Q1 earnings season was in full swing, with automotive parts supplier Genuine Parts seeing a positive response to its increased profit projections for 2024. The health insurance company Elevance Health reported higher than predicted quarterly profits and a slight elevation of its yearly earnings forecast, resulting in its shares rising. Lastly, DR Horton, a leading housebuilder in the country, reported an increased annual revenue forecast resulting from a bolstered sales performance given the limited housing supply.