The Stoxx 600 index, which is Europe’s benchmark, finished at a never-seen-before high on Wednesday due to impressive earnings from corporations such as Anheuser-Busch Inbev and Siemens. This occurred while investors also speculated about when significant central bank rate reductions could occur.
Europoean and Chinese economic growth were stronger than anticipated, and the European Central Bank may decrease rates in the near future, both of which indicate ongoing profit recovery in subsequent quarters, according to Deutsche Bank analysts.
In Dublin, a 0.5% increase in the Iseq was observed, due to progress made by Ryanair and Kingspan, which counterbalanced bank stocks’ falls. There was a boost of over 2% for Ryainair to a price of €19.39 and insulation firm Kingspan saw a 1.7% rise to €89.60.
Smurfit Kappa, a packaging conglomerate had a slowed session and went down by 0.1% to €43.75. Kerry went down slightly by 0.2% and ended at €80.30. Bank stocks didn’t fare well either, with Bank of Ireland experiencing a near 1.4% slide to €10.59 and AIB saw a 1% decrease, finishing at €5.12.
In London, the FTSE 100 index reached new records stimulated by promising corporate updates, while all eyes were on the Bank of England’s interest rate decision. The FTSE 100, majorly comprised of export companies wrapped up the session by advancing 0.5%. The weaker pound supported this index. Additionally, Sterling experience a fall against the dollar as a dovish hold was expected from the UK’s central bank at the monetary policy meeting on Thursday.
Furthermore, AstraZeneca’s shares surged 1.2% after the pharmaceutical manufacturer announced a global recall of its Covid-19 vaccine due to an excess of updated vaccines since the pandemic began. The FTSE 250 index, considered mid-cap, also made progress by 0.4%, maintaining its position at approximately 15-month highs.
In a broader European context, the pan-European Stoxx 600 concluded a rise by 0.3%, achieving a record high. This came after Tuesday’s gains of over 1%. Industrial shares aided the primary index after Siemens Energy improved its outlook for 2024 and declared beating its second-quarter results. The shares of this power equipment manufacturer surged 4.7%, leading the gains of the German benchmark index.
The most significant beer maker globally, Anheuser-Busch Inbev, reported a 5.6% growth following better-than-expected earnings for the first quarter. Their performance also confirmed their projection for 2024. Their position was the primary driving force behind the 1.6% rise in the Stoxx’s food and beverage index, making them the top performer in the main Belgium index.
Puma’s 11% increase also added weight to the market after reporting sales for the first quarter that aligned with analyst forecasts. Ahold Delhaize’s supermarket group also saw a similar trend, with a 2.4% increase after surpassing first-quarter core profit margin estimates. The broader aerospace and defence index witnessed a 1.4% increase, primarily due to a 2.7% increase in Leonardo, an Italian company, following the announcement of their first-quarter orders and revenue growth.
Conversely, BMW experienced a 2.9% drop after the car segment’s first-quarter EBIT margin failed to meet the consensus. This led to a 1.3% decrease in the automobile index, making it one of the worst-performing sectors. Sabadell’s 4.3% loss was another notable movement after BBVA stated that they had no plans to enhance their all-share takeover offer.
In the US, the S&P 500 remained consistent during the initial trading hours. Investors took a step back to assess the monetary policy outlook following a recent surge. Among individual stocks, Uber’s shares experienced a significant drop of almost 9% due to an underwhelming forecast. This dip was triggered by a surprise loss for the first quarter and projections for the second quarter’s gross bookings falling short of expectations.
Tesla’s shares slipped by 1.5% following reports that US prosecutors are exploring the possibility of a case related to securities or wire fraud. This investigation is based on allegations that the company has misled investors and customers about the self-driving capabilities of its electric vehicles. Similarly, mega-cap stocks such as Nvidia, Amazon, and Alphabet also reported a dip in their shares. After the American government annulled some of Intel’s export licences to China, the tech giant anticipated a sales hit, leading to a 2.9% decline in share value.
Sources: Reuters