Irish shares in buying spree as European stocks hit record high 

The buying spree was sparked after figures on the cooling US inflation did little to hinder bets for an interest rate cut by the US Fed in June

Germany's Dax also ended at a fresh record high after its national consumer data showed inflation eased in February.

Irish shares joined in a global rally that saw European stock markets reach all-time highs on expectations, that both US and European Central Bank (ECB) official interest rates will soon start heading significantly lower, following almost two years of aggressive hikes.

The stock index that tracks 600 of Europe’s largest companies closed at a record high, led by a broad range of buying across many industrial sectors — including car makers and banks — which will likely have much to gain when the ECB starts cutting interest rates.

The buying spree was sparked after figures on cooling US inflation did little to hinder bets for an interest rate cut by the US Federal Reserve (Fed) in June.

The pan-European Stoxx 600 index jumped 1%, also helped by confirmation that German inflation had also eased in February.

The new record for the Stoxx 600 index reflects market bets, following the ECB meeting in Frankfurt last week, that the ECB will also start cutting in June.

In Ireland, the Iseq Overall index closed at 9,706, up almost 11% since the start of the year. The Iseq had hit an-all time high of 10,041 in late February in 2007.

Yesterday, the two major Irish banks that dominate the banking market — Bank of Ireland and AIB — rose by 2% and 1.4%, respectively.

PTSB shares fell by 2%. Property shares, which tend to benefit when interest rates are cut, also fell: Housebuilders Cairn Homes and Glenveagh Properties ended 2.8% and 0.3% higher, respectively.

Shares in Clare-based Mincon, which makes mining, oil drilling, and quarry equipment, jumped 3.5% on bets that interest rate cuts would boost international orders for the firm.

Based on the US inflation report, traders stood pat on bets that the US Fed will begin its easing cycle in June. Market participants could be drawing relief from the slight easing in core inflation, Equiti Capital’s chief economist Stuart Cole said.

In the US, bets on the timing of the Fed’s first rate cut remained largely unchanged, pricing in a 69.7% chance of a cut of at least 25 basis points in June, according to CME’s FedWatch Tool, down from 71.7% in the prior session.

Germany’s Dax index ended at a fresh record high after its national consumer data showed inflation eased in February to 2.7%.

“I think the ECB will be going first,” said Mr Cole, referring to the timing of the first rate cut, “but I am hesitant regarding the [Fed].

“They are so cautious about getting the inflation argument wrong again, they are naturally bent on being over-cautious,” he said.

French blue-chip shares also rose to an all-time peak, while Britain’s Ftse 100 index scaled its highest level since May 2023. Europe’s automobile index jumped 2.4%, boosted by a 11.5% advance in the shares of Porsche, following results from the sportscar maker.

Rate-sensitive European banking stocks climbed 1.9%, clocking their biggest daily percentage gain in five months. However, shares in British homebuilder Persimmon ended almost 4% lower after missing profit expectations and warning of subdued market conditions.

• Additional reporting by Reuters