Global stocks rose, with European markets at record highs, as signs of moderating inflation cemented expectations of interest-rate cuts across the developed world. Ireland outperformed European markets on Friday with the Iseq finishing up 0.75 per cent on the day.
Dublin
From a banks perspective, some Irish lenders had a positive day but it was not a sectoral move as PTSB had a low finish on Friday. AIB finished up 1.9 per cent closing at €5.44 a share. They were one of the main drivers on the Irish market along with Bank of Ireland, up 1 per cent. On Friday morning the Government announced a reduction of their stake in AIB to slightly below 25 per cent, something that might have fed into the performance. However, PTSB closed at minus 3.6 per cent, finishing at €1.60.
Ryanair was up 1 per cent on the day finishing at €15.94. Glanbia was up almost 1 per cent finishing at €16 and Kerry Group finished up 1 per cent at €90.80 a share. The travel and leisure sector also performed well with Dalata up 1.6 per cent, finishing at €4.40.
Europe
The Stoxx 600 Index added 0.4 per cent to 526.66, bringing gains for the week to 1.6 per cent. The index has rallied for the past four straight weeks, the longest streak since March, with investors growing increasingly confident that the European Central Bank will lower rates and that the global economy is continuing to grow.
Economic data on Friday showed that euro-zone consumer prices rose 2.2 per cent from a year ago in August, a significantly slower pace than July’s 2.6 per cent. The positive inflation news will help sustain the upbeat mood evident at the Federal Reserve’s annual Jackson Hole gathering last week, with chair Jerome Powell joining ECB and the Bank of England officials in firmly signalling that rates are headed down.
Inflation in the euro zone fell to its lowest level in three years in August, setting the stage for a further cut in the ECB’s rates next month.
London
The UK’s main stock index hit over a three-month high on Friday, clocking gains for the topsy-turvy month, with real-estate shares in the lead as interest rate-cut hopes held firm, while energy shares tumbled on demand concerns, capping intraday gains.
The blue-chip FTSE 100 index ended flat, but registered its second straight monthly gain and third consecutive weekly advance.
The FTSE 250, which tracks mid-cap UK companies, rose by 0.3 per cent, but declined over the past week and month.
The US personal consumption expenditure index, the Federal Reserve’s preferred inflation gauge, rose 2.5 per cent in July on an annual basis compared with an estimate of 2.6 per cent, according to economists polled by Reuters.
New York
The Nasdaq and the S&P 500 inched up in choppy trading on Friday ahead of the long weekend, after signs of moderating price pressures strengthened bets for an interest-rate cut at the Federal Reserve’s upcoming meeting in September.
The personal consumption expenditure index, the central bank’s preferred inflation gauge, rose 2.5 per cent in July on an annual basis compared with an estimate of 2.6 per cent, according to economists polled by Reuters. On a monthly basis, it rose 0.2 per cent as expected.
Among rate-sensitive megacaps, Amazon.com and Microsoft gained 1.3 per cent and 0.7 per cent, respectively. Chip stocks rose; Broadcom added 3.4 per cent and Advanced Micro Devices climbed 1.4 per cent, aiding the Philadelphia SE Semiconductor index’s 2.2 per cent rise.
Friday’s PCE report is the last one before the Fed’s September meeting and follows chair Jerome Powell’s comments last week, when he expressed support for an imminent policy adjustment. – Additional reporting: Reuters
