European shares rise on easing Nord Stream gas-crunch fears

European shares hit more than a five-week high on Tuesday after a report that Russian gas flows to Europe via the Nord Stream 1 pipeline are restarting on time allayed concern about a continental energy supply crunch.

Reuters cited sources as saying that the pipeline, used for more than a third of Russian natural gas exports to the EU and which was shut down last week for routine maintenance, was expected to resume operation on Thursday though at less than capacity.

Earlier on Tuesday, the Wall Street Journal reported, citing EU budget commissioner Johannes Hahn, that the European Commission did not expect the pipeline to restart after the scheduled maintenance.

“The energy crisis is one of the biggest worries for Europe’s investors and citizens ... Having a stable source of energy as opposed to an unstable source is certainly a meaningful piece of news,” said Steve Sosnick, chief strategist at Interactive Brokers.

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The pan-European Stoxx 600 index closed 1.4 per cent up at its highest level since June 10th, logging its third consecutive day of gains.

DUBLIN

Banking stocks stood out as a bright spot on the Iseq, amid reports that the European Central Bank may opt for a half percentage point increase in interest rates this week — twice as much as it had guided — to try to curb soaring inflation.

Irish banks are seen by analysts as being among the main beneficiaries across the euro zone banking sector from rate increases, given that they are more reliant on interest income than most of their peers and have high levels of surplus cash on deposit with the ECB, attracting negative interest rates.

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AIB jumped 2.8 per cent to €2.21, while Bank of Ireland advanced 4.5 per cent to €5.85. Permanent TSB gained 0.8 per cent to €1.20.

Construction-related stocks were also higher, with CRH up 2.4 per cent at €35.28, while Kingspan advanced 1 per cent to €55.64.

LONDON

The UK’s benchmark FTSE 100 index rose 1.4 per cent as a buoyant global mood and strong gains by banks and consumer staples offset fears of a big interest rate hike next month after stronger-than-expected jobs data.

The UK’s unemployment rate held at 3.8 per cent in the three months to May and the number of people in work rose by the most since the middle of 2021, data showed, suggesting the cost-of-living squeeze has not yet hit demand for staff.

Banks rose 1.7 per cent, along with defensive stocks like consumer staples. Unilever and British American Tobacco added 2 per cent and 1.3 per cent, respectively.

Money transfer company Wise jumped 14.9 per cent after posting strong revenue growth.

EUROPE

Gains were broad-based across Europe, with automobile sector leading the pack with a 3.1 per cent jump, followed by a 2.9 per cent rise in banks.

Germany’s Dax index surged 2.7 per cent, the most among the regional indexes.

Shares of EDF jumped 14.7 per cent after the French government offered to pay €9.7 billion to take full control of the power company in a buyout deal.

Telenor fell 5.5 per cent after the Norwegian telecoms operator lowered its earnings guidance for the year.

NEW YORK

Wall Street’s main indices were ahead in early afternoon trading as the earnings season moves beyond big banks, and investors keeping a close watch on the impact of higher inflation on demand even as a stronger dollar dents profits.

A soaring US currency led pharma major Johnson & Johnson to trim its annual adjusted profit view and IBM to warn of a nearly $3.5 billion (€3.4 billion) foreign exchange hit.

Apple advanced on an overnight report that the company planned on slowing hiring and spending growth next year.

Other high-growth stocks such as Tesla, Microsoft, Meta Platforms and Amazon.com were also trading higher.

Boeing jumped on plans by private equity firm 777 Partners to buy up to 66 more Boeing 737 MAX jets.

Hasbro beat market estimates for quarterly profit, sending the toymaker’s shares higher.

— Additional reporting: Reuters