European values slide as investors fret over US and ECB rate decisions

European shares slipped on Monday as investors braced for US and European Central Bank interest rate decisions, while rising Covid-19 infections in China also weighed on sentiment.

Dublin

The Irish index of shares closed the session in the red, dragged almost 1 per cent lower by falling bank shares, building stocks and travel companies.

Bank of Ireland saw its share price fall more than 3.3 per cent over the day to close at €7.75, while Permanent TSB was down 1.4 per cent by the closing bell. AIB shares shed 0.76 per cent, finishing the day at €3.146. Investors awaited interest rate moves.

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Elsewhere in the market, travel stocks were hit. Shares in airline Ryanair fell 0.42 per cent to €13.18, while hotel group Dalata was down almost 4.5 per cent to €3.19.

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Building stocks were also hampered, with CRH off 1 per cent, and Kingspan shedding 0.3 per cent.

London

London’s markets were trimmed back after falls in the Asian markets and a sharp rise in natural gas prices. The FTSE 100 finished the day down 30.66 points, or 0.41 per cent, at 7,445.97.

In company news, London Stock Exchange Group (LSEG) finished higher after Microsoft agreed to snap up a 4 per cent stake from the Blackstone/Thomson Reuters Consortium. As part of a 10-year partnership, the two firms will work together to jointly develop new products and services for data and analytics using its Microsoft Azure, AI and Teams platforms. Shares in LSEG climbed 220p higher to 7,626p as a result.

Metro Bank also made strong gains on Monday despite being fined £10 million by the UK’s financial regulator for knowingly publishing incorrect information to investors in 2018. Two of the challenger bank’s former bosses, chief executive Craig Donaldson and chief financial officer David Arden, have been given individual fines of £223,100 and £134,600 respectively by the Financial Conduct Authority. Nevertheless, shares closed 6.6p higher at 112.6p.

Royal Mail owner International Distributions Services (IDS) slid lower after brokers at HSBC cut their valuation of the stock.

IDS shares closed 8.3p lower at 204.3p after the downgrade, which comes in advance of planned strikes by Royal Mail postmen later this week.

Europe

With surging Covid-19 cases spurring concerns about a disruption to Chinese economic activity, industrials and some China-exposed luxury firms such as LVMH weighed on the Stoxx 600, with the index closing down 0.5 per cent.

China-exposed insurance company Prudential slid 2.7 per cent, leading Europe’s financial sector lower.

Meanwhile, Danish food ingredients and enzymes makers Novozymes and Chr Hansen said they have agreed to merge. Chr Hansen shares rose 17.6 per cent, while Novozymes dropped 15.2 per cent after the joint announcement.

Sanofi slipped after the French drug maker on Sunday said it pulled out of talks to buy Horizon Therapeutics.

New York

US stock indexes kicked off an eventful week on a positive note as investors braced for inflation data and the Federal Reserve’s policy decision amid worries of a looming recession.

Much of the boost to Wall Street’s main indexes on Monday came from a 2.1 per cent rise in shares of Microsoft Corp, following the software maker’s plans to buy a 4 per cent stake in the London Stock Exchange Group.

At 15:05 on Monday afternoon, the Dow Jones Industrial Average was up 165.64 points, or 0.49 per cent, at 33,642.10, the S&P 500 was up 12.74 points, or 0.32 per cent, at 3,947.12, and the Nasdaq Composite was up 28.94 points, or 0.26 per cent, at 11,033.56.

Most rate-sensitive shares including Apple, Nvidia and Alphabet gained between 0.1 per cent and 1.0 per cent.

Among other stocks, Rivian Automotive lost 2.7 per cent after the company paused its partnership discussions with Mercedes-Benz Vans on electric van production in Europe.

Biotech firm Horizon Therapeutics jumped 14.6 per cent following a buyout offer from Amgen, while Coupa Software surged 26.7 per cent on a media report of Thoma Bravo being in advanced talks for an acquisition. — Additional reporting: Reuters, PA

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