European shares logged a second consecutive record close on Wednesday, boosted by financials as investors were relieved by a potential end to a historic US Government shutdown and weighed a series of corporate updates.
The pan-European Stoxx 600 index ended up 0.7 per cent at 584.23 points.
France’s CAC 40 gained 1 per cent, while Spain’s Ibex added 1.4 per cent. Investors globally were hopeful that the US House of Representatives could soon vote to end a Government shutdown that had halted economic data that is crucial for policymakers.
Although concerns linger over the impact it could have had on the world’s largest economy, expectations are that any signs of a weakening US labour market could nudge the Federal Reserve to take a more dovish outlook on monetary policy.
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Iseq heavyweight Ryanair rose marginally (0.3 per cent) amid falling oil prices and as the airline has moved to 100 per cent digital boarding passes.
As details of the Government’s new housing plan emerged, the State largest home builders Glenveagh and Cairn Homes saw their share values rise by 1 per cent and 0.3 per cent respectively.
In what was a positive session for financials, AIB and Bank of Ireland rose by 1.2 per cent and 1.9 per cent respectively. Permanent TSB traded flat as investors continue to react to the bank putting itself up for sale.
Europe
Banks were the biggest boost to the Stoxx index with ABN Amro rising 2.6 per cent after the Dutch lender announced upbeat quarterly earnings and that it had acquired domestic commercial lender NIBC Bank to strengthen its position in its home market.
European financial stocks have outperformed the broader market on annual price returns, helped primarily by better-than-expected earnings. Banks-heavy bourses in Spain and Italy have starkly outperformed the region’s Stoxx benchmark this year.
European healthcare stocks added 1.1 per cent, while energy stocks fell 0.6 per cent.
London
London’s FTSE 100 logged a third consecutive record close, supported by gains in utilities and mining shares as investors welcomed signs of a potential end to the prolonged U.S. Government shutdown.
The blue-chip index closed 0.1 per cent higher, within striking distance of the 10,000 mark.
Leading Wednesday’s gains, the utilities sector advanced 4 per cent as SSE surged 16.8 per cent to a record high after unveiling a £33 billion five-year investment plan to upgrade the UK’s regulated electricity networks and expand its renewable business.
Metal miners gained 1.3 per cent as copper prices strengthened in global commodity markets.
The improved market sentiment followed growing optimism that the US House of Representatives may soon vote to end the Government shutdown that has disrupted crucial economic data releases.
Back in the UK, investment banking stocks fell 1.7 per cent with 3i Group in the lead with 3.3 per cent losses.
Home builders declined 2.3 per cent. Taylor Wimpey’s shares fell nearly 4 per cent after reporting a softer autumn selling season as British buyers hesitated ahead of the budget announcement.
Energy shares fell 1 per cent as oil prices dipped, with oil majors BP and Shell dropping 1.7 per cent and 0.7 per cent, respectively.
New York
Wall Street’s main indexes were mixed on Wednesday, with the Dow at a record high and the Nasdaq lagging peers, as investors rotated out of technology stocks while monitoring progress on a likely end to the historic US Government shutdown.
Most big tech stocks fell with Alphabet, Tesla and Meta Platforms down between 2.3 per cent and 2.6 per cent.
Communication services and consumer discretionary sectors were the biggest drags on the S&P 500.
“We have seen somewhat of a rotation away from Nasdaq-heavy leadership toward other areas of the market doing pretty well like healthcare and financials,” said Matt Stucky, chief equity portfolio manager at Northwestern Mutual.
“A critical component for seeing markets broaden out is having earnings broaden out as well.”
News of Japanese technology investor SoftBank Group offloading its Nvidia stake and a forecast cut from AI cloud services provider CoreWeave had renewed concerns about rapidly growing valuations among tech companies on Tuesday.
AMD, which advanced 9.5 per cent on Wednesday after the chip designer unveiled a $100 billion data-centre revenue target among other AI-driven goals, was an exception. It boosted the broader semiconductor index 1.5 per cent.
Traditionally defensive sectors such as healthcare and consumer staples saw gains. Eli Lilly hit a record high and was last up 1.7 per cent.
The third-quarter earnings season is slowly winding down, but all eyes will remain on Nvidia’s earnings next week, a test of the optimism around AI that has driven Wall Street to record highs this year.
Among other moves, shares of IBM rose 1.7 per cent after announcing new quantum computing chips. – Additional reporting Reuters
