Irish shares little changed as European stocks rise
EUROPEAN stocks advanced, as banks rebounded, while investors weighed the possibility of the Federal Reserve increasing interest rates sooner than had been expected.
BY mid-afternoon yesterday in Dublin, however, Irish shares were little changed. The ISEQ Overall Index was down fractionally by 0.03pc, or 2.12 points, to 6,163.82.
The leaders on the Dublin market included speciality baker Aryzta, which rose 2.6pc to €35,92, while insulation group Kingspan increased 1pc to €23.51.
On the other side of the board, the laggards included drinks group C& C, which slipped 0.8pc to €3.91, while packaging giant Smurfit Kappa dropped 1.1pc to €24.
Elsewhere, the Stoxx Europe 600 Index climbed 0.5pc to 336.52 by midafternoon in London, after earlier sliding as much as 0.5pc. Italian lenders led a gauge of bank-related companies to the biggest gain of the 19 industry groups on the Stoxx 600.
Miners fell the most on the equity gauge as metals prices retreated.
Expectations for the US central bank to add to last December’s interest rate increase are starting to build after higher-thanexpected consumer-price data, with comments from Fed presidents Dennis Lockhart and John Williams that at least two rate increases may be warranted this year also stoking speculation of a move.
“The signs of an interest rate hike in the US are being seeing as an opportunity to add up on European banks by those who are under invested in them,” said Herbert Perus, head of equities at Raiffeisen Capital Management in Vienna.
“It’s just a small rally and not a major move. Markets will continue on their sideways path.”
European shares have lost momentum since an April 20 peak as concerns about slowing global growth and worries over central-bank policies resurfaced amid mixed earnings reports.
The index has gone almost a month without ending at least 1 pc higher, signalling a lack of triggers to boost shares.
Goldman Sachs Group has cut its rating on equities to neutral, warning that stocks won’t be attractive until they exhibit sustained earnings growth.
The key risks are a slowdown in China, increased European political uncertainty, falling commodity prices and changes in the Fed’s interestrate cycle, according to a strategists’ note.
Meanwhile, the pound jumped amid evidence the campaign to keep Britain inside the European Union is extending its lead.
Sterling climbed the most this year versus the euro.