Global stocks rebound after hawkish Federal Reserve comments

Global stocks regained ground on Tuesday and oil prices dipped as investors adjusted their expectations for rate hikes following hawkish comments from the US Federal Reserve.

Dublin

Euronext Dublin was flat as it underperformed relative to its international peers, but the banks bounced back from a recent volatile period. Bank of Ireland finished the day up 2.5 per cent while AIB was up 5 per cent.

It was also a strong day for Dalata – the biggest hotel operator in the State – which finished the day up 5 per cent. Elsewhere, packaging company Smurfit Kappa was up 1 per cent.

On the downside, building materials company CRH, which is one of the biggest players on the index, was down 1.6 per cent.

Other big players, insulation specialist Kingpan and dairy company Kerry Group, were down 1.5 per cent and 1 per cent respectively. Another food name, Glanbia, ended the day down 3 per cent.

London

Blue-chip shares rose for a fifth straight session, led by banks and insurance stocks, as investors awaited the release of inflation data and a budget update on Wednesday.

The FTSE 100 index ended 0.5 per cent higher, hitting a three-week high after having recouped all of its year-to-date losses in the previous session.

Rate-sensitive banks added 3.1 per cent and insurers climbed 3.4 per cent, as bets on aggressive interest rates hikes by major central banks grew after US Federal Reserve chair Jerome Powell’s hawkish comments on Monday.

Further gains were capped by energy stocks, which erased early gains to end 0.7 per cent lower, tracking weaker crude prices as the dollar strengthened and it looked unlikely the European Union would pursue an embargo on Russian oil.

Carnival fell 1 per cent after the cruise operator forecast a loss for the year as efforts to gradually restart operations after a long pandemic-led hiatus face a setback from a surge in fuel prices due to the Russia-Ukraine war.

The domestically focused midcap index advanced 0.5 per cent with a 3.9 per cent jump in IT services and consulting firm Softcat after its half-year earnings helping sentiment.

Europe

The pan-European Stoxx 600 rose 0.9 per cent after a lacklustre start to the week, helped by a 2.5 per cent jump in European banks.

Other cyclical sectors such as insurers and autos, preferred bets for a rising rates scenario, rose 2 per cent and 1.6 per cent respectively.

Europe’s largest online restaurant food ordering service Just Eat Takeaway gained 3.2 per cent on a partnership with McDonald’s to expand delivery.

Italian defence group Leonardo was 0.4 per cent higher after its US unit DRS agreed to sell its satellite communications business GES to SES for $450 million (€408 million).

Finland’s Nokian Tyres said it would continue production in Russia to retain control of its local factory, at a time when many companies are halting operations in protest. Shares of the company fell 0.3 per cent.

Tech giant SAP rose 0.6 per cent after announcing a venture with Boston Consulting Group to help some of the world’s biggest companies overhaul their business strategy and accelerate their efforts to cut carbon emissions.

New York

The Nasdaq led Wall Street’s main indexes higher as investors bought the dip in technology stocks.

Bank shares, meanwhile, rose tracking a rise in the benchmark 10-year Treasury yield to 2.36 per cent. The S&P 500 banks index gained 2.6 per cent, powered by a 4.6 per cent rise in Wells Fargo.

Megacap Apple, Microsoft, Amazon.com, Meta Platforms and Alphabet gained between 1.7 per cent and 3.2 per cent to provide the biggest boost to the S&P 500 and the Nasdaq.

Tesla added 2.4 per cent as the electric-car maker delivered its first German-made cars to customers at its Gruenheide gigafactory.

Nike shares advanced 4.6 per cent as it beat quarterly profit and revenue expectations, and said manufacturing issues pinching sales over the past six months were now behind it.

– (Additional reporting: Agencies)

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