European shares fall as more ECB rate hikes likely

European shares bid farewell to their initial momentum on Monday after European Central Bank officials backed the need for more interest rate hikes, while investors assessed the lower than expected rebound in euro zone January retail sales.

Dublin

The Irish index of shares rose 1.3 per cent in trading on Monday, bucking wider trends as banking shares and travel stocks lent some support.

Bank of Ireland shares climbed 1.5 per cent to €10.44 by the close, while AIB gained almost 2 per cent. Permanent TSB was the outlier, with stock falling 0.74 per cent to €2.70.

Elsewhere, Glanbia saw a modest increase of just under half a per cent to €12.95. It was a tougher day for Smurfit Kappa, with the packaging giant’s shares sliding 1.3 per cent, hitting a low of €35.83 around noon before regaining some ground to €35.94.

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Paddy Power owner Flutter saw its shares increase more than 4 per cent to €157.25 by the close of the session, while Ryanair shares added 1.3 per cent to €15.60.

London

The UK’s blue-chip FTSE 100 fell on Monday as mining stocks slumped after top metals consumer China’s decision to set a modest growth target, while a surge in luxury carmaker Aston Martin’s shares lifted the mid-cap FTSE 250.

The export-oriented FTSE 100 fell 0.2 per cent, dragged down by a 3.3 per cent slide in industrial metals miners.

Copper prices were in the red as China set a lower than expected gross domestic product target of 5 per cent for the year. Policy sources had recently told Reuters that Beijing could set a range as high as 6 per cent.

The domestically-focused FTSE 250 was up 0.7 per cent, lifted by Aston Martin shares, which rose for seventh straight sessions.

Both the large-cap and mid-cap FTSE indexes had a strong run in the previous week after data showed resilience in the domestic economy and hopes grew that the Bank of England is closer to the end of its monetary tightening cycle.

Europe

The Stoxx 600 index was flat, after last week clocking its best week since the beginning of the year.

Among big movers, Lufthansa gained close to 6 per cent after HSBC upgraded the German airline to “buy” from “hold”.

Telecom Italia jumped 3.1 per cent after Italian state lender CDP’s board approved a non-binding offer for the fixed-line network of the former phone monopoly.

Helvetia Holding advanced 4.5 per cent after the Swiss insurance group reported a full-year earnings beat and hiked its dividend target.

A fall in miners pushed basic resources down 2.7 per cent, to the bottom of the sector indexes, as base metal prices dropped after China set an economic growth target at about 5 per cent, towards the lower end of expectations.

However, shares of luxury giant LVMH gained 1.2 per cent, helping the index.

Among other stocks, Belimo Holding slid 8.9 per cent to the bottom of the index after the Swiss heating and ventilation solutions maker gave a cautious 2023 margin guidance.

New York

A rise in Apple shares and easing Treasury yields bolstered the tech-heavy Nasdaq index on Monday as focus shifted to Federal Reserve chair Jerome Powell’s testimony and jobs data this week for fresh cues on the trajectory of interest rates.

Shares of the iPhone maker climbed 3.2 per cent as Goldman Sachs initiated coverage with a “buy” rating.

Other rate-sensitive megacap stocks including Microsoft and Meta Platforms were also among the top boosts to the S&P 500 and the Nasdaq

At 12.00pm (ET), the Dow Jones Industrial Average was up 0.39 per cent at 33,522.46, the S&P 500 was up 0.68 per cent at 4,072.96, and the Nasdaq Composite was up 1 per cent, at 11,805.11.

US-listed shares of Chinese companies Baidu and PDD Holdings fell more than 1 per cent each.

Shares of cryptocurrency-related companies fell after Silvergate Capital pulled the plug on its crypto payments network, after raising doubts about the company’s ability to stay in business. – Additional reporting: Reuters