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Shares surged after Fed Chair Kevin Warsh hinted a rate increase, lifting European indexes. Key corporate updates included Irish Continental Group postponing a buyout vote and Goodwin reporting strong profits. Market reactions spanned from the Stoxx Europe 600 to UK stocks, with inflation concerns driving expectations for the ECB and Fed actions.
Shares rose on Friday as Federal Reserve chairman, Kevin Warsh, signalled a likely interest rate increase at the US central bank’s annual gathering at Jackson Hole, Wyoming.
Warsh said in his address that rate-setters would have “work to do” if price rises across the world’s biggest economy did not ease shortly, sparking renewed bets on Wall Street for rate rises. Ferry company Irish Continental Group dipped 0.27 per cent to €7.30 after postponing an extraordinary general meeting to vote on a €1.2 billion management buyout. The group’s board, chaired by John B McGuckian, will hold the meeting originally scheduled for Friday on September 10th.
Some shareholders argue that the bid under values the ferry operator. Data centre boom turns many niche specialist businesses into multimillion-euro industry players Clare Walsh and Paul Vallely: ‘We have a brand that’s on trend, affordable and fun in a category most people find boring’Insulation and building materials group Kingspan slipped 1.83 per cent to €102.10 while Ryanair gained 1.6 per cent to €23.52.
UK stocks closed higher on Friday as investors digested corporate updates as well as Federal Reserve chairman Kevin Warsh’s comments at the Jackson Hole symposium that boosted the chances of a US interest rate hike next month. Among single stocks, Goodwin climbed 1.4 per cent to 18,460 pence sterling after the mechanical engineering company reported full-year trading profit of £77.50 million , more than double from a year ago.
Recruiter Hays climbed about 5.1 per cent 76.85p after analysts at Panmure Liberum upgraded the stock to “buy” from “hold”The Stoxx Europe 600 Index rose 0.5 per cent in the morning putting it on track to finish August about 1 per cent higher. Auto stocks outperformed. BMW was up 4.5 per cent at €62.64 while motor parts supplier Forvia added more than 5 per cent to €9.04. Citigroup Analysts added both to its positive catalyst watch list.
France’s CAC 40 rebounded 0.9 per cent after its worst day in seven weeks. Latest data showed that the country’s inflation accelerated more than expected amid higher energy costs, strengthening the case for the European Central Bank to raise interest rates next month. Elsewhere, Brussels-listed investment business Ackermans & Van Haaren rose 7.9 per cent after agreeing to invest €93 million in Norwegian salmon farmer Grieg Aqua and posting better-than-expected earnings.
A robust corporate earnings season and resilient economic growth have supported the European rally, although it is entering a more seasonally challenging period as economic concerns build. September tends to be the worst month of the year for the Stoxx Europe 600 Index, with the gauge falling 2.1 per cent on average in the past five years.
Wall Street traders sent stocks higher as Federal Reserve Chair Kevin Warsh’s vow to bring inflation under control sent long-dated bond yields further away from multi-decade highs. Warsh said at the Fed’s annual economic symposium in Jackson Hole that the US central bank will “have work to do” if policymakers are not confident that underlying inflation is returning to its 2 per cent target, in remarks that acknowledged financial conditions do not appear restrictive.
Among Wall Street indexes, at 4:09pm Irish time the Dow Jones Industrial Average rose 162.95 points, or 0.30 per cent, to 53,732.39, the S&P 500 rose 29.12 points, or 0.38 per cent, to 7,760.11 and the Nasdaq Composite rose 111.40 points, or 0.41 per cent, to 26,652.75. – Additional reporting: Bloomberg, ReutersHawkish Kevin Warsh hints Fed will raise rates if US inflation does not fall soonHow ICG’s push to close €1.2bn buyout in August’s holiday lull backfiredKillarney experiences ‘worst flooding in a lifetime’ as ‘significant’ water levels seen in Cabra‘The skies opened’: Killarney clean-up continues after ‘unprecedented’ flash floodingHawkish Kevin Warsh hints Fed will raise rates if US inflation does not fall soon
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