On Friday, increased earnings saw a rise in European stocks, fuelled by a revitalisation in luxury among various other sectors. Steady inflation stats from the US encouraged global market stability, paving the way for potential interest rate cuts in September by the Federal Reserve. A resurgence in the technology industry also stimulated the mood on Wall Street.
In Dublin, over the week the Irish index surged almost 1.6%, underpinned by progress in the banking, construction, and food sectors. Although Allied Irish Banks’ performance was largely stagnant, Bank of Ireland experienced a 1.56% growth with shares closing at €10.44. Food corporation Glanbia witnessed a 2.13% upsurge on Friday with shares reaching €18.23, whilst Kerry Group recorded a more sober rise of 0.7%. Within the property and construction fields, home construction company Glenveagh expanded by 2.35%, whereas Cairn Homes grew by 1.4% at the close of play. The week ended on €83.65 for insulation expert Kingspan, marking a 2% rise. Ryanair recovered with a 3.55% gain, totalling €15.01 by the end of the day, despite sustaining pressure following a recent quarterly profit drop. Hotel conglomerate Dalata saw a dramatic rise to €4.20, marking a 2% growth.
Over in London, domestically-orientated UK stocks on the FTSE 250 index marked a strong finish, performing the strongest in over two years. The commendable reports on company earnings and a rebound on Wall Street influenced by the US’s favourable inflation data were key drivers. The FTSE 250 witnessed the greatest increase since March 2022, up 2.3%, while the FTSE 100 jumped 1.2% to a two-month peak. NatWest’s shares soared 7% to a near-decade high, following a revision in its forecast and acquisition of a £2.4 billion mortgage portfolio from Metro Bank. Babcock International also saw a healthy increase of 8.6% bolstered by a maintained full-year forecast. Jupiter Fund Management also surged 6.8% following a better-than-expected profit report.
The STOXX 600, representative of Europe’s wider market, closed at 0.8% higher after dipping to its lowest in over two months prior. As a result, an approximately 0.5% weekly rise was noted.
The CEO of EssilorLuxottica, the makers of Ray-Ban, reported a potential investment from Meta, leading to a 7.4% jump in share value. Meanwhile, luxury goods manufacturer Hermes experienced a 3.4% increase after outperforming Q2 sales forecasts.
Top-performing sectors in the STOXX index were mostly attributed to construction and materials which saw an increase of 1.7%; this included a 3.5% advancement for French firm Vinci following reported H1 revenue growth and profit margin increase.
In contrast, French IT consultancy Capgemini saw a decrease of 2.5% in shares after predicting an unexpected drop in annual earnings. Additionally, Swedish tech company Hexagon experienced a 3.3% drop following underperforming Q2 results, with an affirmation of the ongoing slump in construction and car markets continuing to impact Q3 trading conditions.
Back in New York, despite a rough week for tech and chip company shares, Wall Street rebounded on Friday. The Dow Jones Industrial Average saw a substantial gain as a largely agreeable key inflation report kept hopes for an early interest rate cut alive.
Dow’s leap to a monthly high was supported by conglomerate 3M’s 19% surge following an upward adjustment to its annual profit forecast. As the day approached midday, the so-called Magnificent Seven shares showed a mixed performance – while Microsoft and Meta Platforms registered more than a 1% gain, both Tesla and Alphabet saw a decrease by 0.7% and 2% respectively.
Subsequently, the Dow Jones was up by 652.82 points (1.63%) standing at 40,587.89; the S&P 500 increased by 57.19 points (1.06%) to 5,456.41; and the Nasdaq Composite rose by 158.56 points (0.92%) at 17,340.28. Reuters offered additional reporting on this.