European shares end higher as tech, retail lead rebound

European shares ended higher on Monday, clawing back some losses following a dismal start to the year with technology and retail stocks leading gains, while energy shares languished following a drop in crude oil prices.

The pan-European Stoxx 600 closed 0.3 per cent higher after falling as much as 0.7 per cent during the day.

Among the top gainers, technology added 1.2 per cent, snapping a six-day losing streak, while the retail index also gained 1.2 per cent, logging its first gain in seven sessions.

“Stocks had declined in the first week of the year ... the most plausible reason (was) because they’ve gone up a lot (in the last year) and some profit taking was the concrete reason,” said Chris Beauchamp, chief market analyst at online trading platform IG.

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“Now that has abated to an extent, it’s giving us some scope for recovery after what has been a miserable start of the year.”

The European benchmark logged its first weekly decline in eight last week after a stellar rally in the latter half of 2023 amid growing hopes that major central banks could consider interest rate cuts in 2024.

DUBLIN

The Iseq index of shares closed the day up 0.7 per cent at 8,723 in line with other European bourses. The rise was driven by positive moves for Ryanair (up 0.5 per cent at €18.45), Smurfit Kappa (up 1.5 per cent at €35.73) and Kerry (up 1.1 per cent at €78.02). The index’s main financials AIB and Bank of Ireland both lost ground, falling between 0.3-0.4 per cent. Paddy Power owner Flutter meanwhile maintained an upward trajectory, closing the session up 1.3 per cent at €156.50.

EUROPE

A recent string of mixed economic data across the world has pushed markets to scale back their expectations for future policy rate cuts.

On the downside, oil and gas stocks dropped 2.6 per cent on Monday as crude prices declined over 3 per cent following sharp price cuts by top exporter Saudi Arabia and a rise in Opec output.

Shell lost 3.1 per cent after the oil giant flagged an impairment charge of up to $4.5 billion (€4.1 billion) for the fourth quarter.

Investor focus will now shift to the US quarterly earnings season set to kick off this week, while a key inflation report due on Thursday will help set the tone for equity markets around the world.

On Monday’s data front, German industrial orders rose less than expected in November, while a separate reading showed investor morale in the euro zone improved for the third consecutive month in January, to its highest level since May.

LONDON

The UK’s FTSE 100 lagged broader European markets on Monday as energy stocks followed oil prices lower, while investors looked ahead to the start of the earnings reporting period and a slew of economic data this week.

The blue-chip FTSE 100 closed up 0.1 per cent and lagged its European peers that were driven by gains in the tech sector.

The FTSE 350 oil and gas index fell 2.9 per cent as crude prices tumbled nearly 4 per cent on sharp price cuts by top exporter Saudi Arabia and a rise in Opec output.

NEW YORK

Tech-laden Nasdaq jumped more than 1 per cent to a near one-week high on Monday, boosted by a rebound in megacaps and chip stocks, while blue-chip index Dow slipped to a fresh two-week low as Boeing shares tanked following the grounding of some its jets.

Megacaps like Amazon.com and Alphabet gained over 1 per cent, while Apple climbed 1.4 per cent after saying its Vision Pro mixed-reality device will be available for sale from February 2nd in the United States.

Chipmakers Nvidia and Advanced Micro Devices jumped more than 4 per cent each. The Philadelphia SE Semiconductor Index rebounded with a 2.6 per cent advance from its worst week since Oct. 2022.

Meanwhile, Boeing slid 6.6 per cent after the US Federal Aviation Administration (FAA) ordered the temporary grounding of some 737 MAX 9 jets fitted with a panel that blew off an Alaska Air Group jet in mid-air on Friday.

The aircraft manufacturer could lose about $10 billion in value if losses hold through market close. – Additional reporting Reuters

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