End of an era as Fed confirms 0.25% rise

European shares edged up on Wednesday as investors awaited the outcome of a rate-setting meeting at the US Federal Reserve.

At 7pm Irish time, 2pm in Washington, the Fed confirmed a 0.25 percentage point increase in interest rates, as had been expected by markets. The first rise in US interest rates since June 2006 brought a prolonged era of stimulus measures to an end.

Investors will now have to digest the Fed’s signal that the rate increase marked the beginning of a “gradual” cycle of tightening its monetary policy.

DUBLIN

The Iseq was little changed after the day’s trading, closing down 0.2 per cent. Building materials group

CRH

fell 0.75 per cent to €25.74, while Ryanair ended the session down 0.8 per cent at €14.56, erasing a portion of the previous day’s gains.

There were better fortunes for paper and packaging group Smurfit Kappa, which climbed 1.7 per cent to €23.60, and insulation maker Kingspan, up 0.7 per cent to €23.35.

On the ESM market for small companies, Dalata Hotel Group finished up 2 per cent at €5.10 after announcing the acquisition of Tara Towers Hotel for €13.155 million.

LONDON

The FTSE 100 Index rose 0.7 per cent, adding to Tuesday’s 2.4 per cent advance, despite further falls in the price of oil and mixed data on the UK labour market.

Dixons Carphone, Britain's largest electronics and mobile phone retailer, was among the biggest risers, climbing 1.8 per cent after reporting a 23 per cent rise in first-half profit, which beat forecasts. The company trades as Currys, PC World and Carphone Warehouse in the UK and Ireland.

Shares in engine maker Rolls Royce rose after it announced a restructuring designed to turn around the struggling business. It closed up 5 per cent at 566.5p.

EUROPE

The pan-European FTSEurofirst index ended up 0.3 per cent, after climbing 2.9 per cent in the previous session.

The modest gains were reflected in the performances of the major indexes, with the Dax in Germany rising 0.2 per cent and France’s Cac 40 posting a 0.3 per cent gain.

Greek shares rose 3 per cent, outperforming the rest of Europe after the Greek parliament approved a Bill containing reforms demanded by international lenders.

French retailer Casino surged 6.5 per cent, among Europe's best performers, after it said it plans to raise more than €2 billion in 2016 by selling part of its real-estate portfolio in Thailand and Colombia, as well as its Vietnam operations.

France's Zodiac Aerospace fell 3.7 per cent, the worst performer in the FTSEurofirst 300, after saying it was behind schedule in supplying toilets for the Airbus A350. The company is only just emerging from a year-long crisis over delays in production of aircraft seats that disrupted aircraft deliveries.

US

US stocks were on track for a third day of gains as investors awaited the Fed meeting.

Indexes hit session highs within five minutes of the US central bank’s statement.

Honeywell International, a maker of jet engines and gas detectors, among other products, earlier climbed 4.3 per cent after its earnings forecast beat some analysts' estimates.

Homebuilders advanced after housing starts were stronger than forecast, while retailer Walgreens Boots Alliance added 2.6 per cent. FedEx was also up 1.6 per cent in early trading ahead of the publication of its quarterly earnings report after the close of markets.

Equities had earlier trimmed their climb as crude oil prices extended a drop after data showed stockpiles remained ample. West Texas Intermediate crude-oil futures lost 4.3 per cent to $35.76, dragging energy producers down for the first time in three days. Pioneer Natural Resources fell 5.1 per cent, while Marathon Oil and Devon Energy dropped at least 3.7 per cent. – (Additional reporting: Bloomberg/Reuters)