European shares post sixth straight week of gains on hopes of slowing rate hikes

European shares closed flat on Friday but were up for the week as a whole, amid rising hopes that the central banks will slow down the pace of rate hikes after aggressive moves since July.

The pan-European Stoxx 600 index gained 1.7 per cent over five days on signs that the US Federal Reserve could slow its interest rate hikes and corporate earnings that turned out better than expected this season.

Meanwhile, there is a growing expectation that the European Central Bank will opt for a 0.5 of a percentage point rate increase when its governing council meets next month, after two 0.75 point hikes in a row.

DUBLIN

The Iseq overall index declined by 0.5 per cent to 7,313.29, with banking stocks out of sorts, even as AIB said that it was passing on a greater part of the recent European Central Bank (ECB) rate increases to new fixed-rate customers. AIB lost 2.6 per cent to €2.87, while Bank of Ireland declined by 1.5 per cent to €7.26.

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Petroneft, the Russia-focused oil producer that has slumped more than 80 per cent so far this year, managed to close unchanged, even after it said during the session that it would conduct a strategic review including a potential sale of the entire company or some assets, citing difficult operational conditions due to Russia’s invasion of Ukraine.

LONDON

The FTSE 100 rose, with gains in energy and defensive shares offsetting weakness in retail stocks as Black Friday sales began against a backdrop of a worsening cost-of-living crisis.

The blue-chip FTSE 100 rose 0.3 per cent, ending with weekly gains of 1.4 per cent on hopes of smaller rate hikes from the US Federal Reserve.

Real-estate investment trusts (Reits) and home builders were under pressure, while residential property services provider LSL Property Services lost 9.9 per cent after flagging a bleak fiscal 2022 outlook. Berenberg does not expect the trough in UK home builders’ earnings to occur until 2024, the brokerage said in a note on Friday, reiterating its cautious view on the sector.

Retail stocks slipped 0.5 per cent on Black Friday, which typically marks the beginning of the holiday shopping season.

“One thing that we are going to learn from this is how well household spending is expected to keep up over the holiday period,” Craig Erlam, senior market Analyst at Oanda, said.

Devro surged 62 per cent after Saria Nederland agreed to acquire the collagen casings maker in a deal valued at about £540 million (€617 million).

Man Group lost 1.1 per cent after UBS cut the investment manager’s rating to neutral from buy.

EUROPE

Data on Friday showed the German economy grew slightly more in the third quarter than preliminary figures had suggested, bolstered by consumer spending.

Among individual stocks, Credit Suisse slid 6.6 per cent to a record low in the wake of capital raise plans and a weak earnings report released this week.

Rockwool gained 4 per cent after Morgan Stanley raised its price target on the Danish stone-wool manufacturer’s stock.

Elia Group added 4 per cent after the Belgian grid operator raised its 2022 outlook and announced a five-year capex plan.

NEW YORK

The Nasdaq was lower in early afternoon trading, with pressure from Apple while the dollar gained and US treasury market interest rates, or yields, rose as investors shied away from riskier bets.

The mood was jittery as the gift-buying season kicked off on a scheduled half-day for US markets after the Thanksgiving holiday, with investors watching out for signs of weakness in consumer spending with inflation still soaring. While shoppers often turn out in record numbers with hopes of Black Friday discounts, crowds were thin outside stores on what is historically the busiest shopping day.

Adding to inflation concerns, market heavyweight Apple’s shares were weighed down by concerns about electronics outsourcing company Foxconn. The manufacturer’s flagship iPhone plant in China was expected to show a November shipment slowdown as thousands of employees left in the latest bout of worker unrest, Reuters reported, citing an unnamed a source with direct knowledge of the matter. – Additional reporting, Reuters