Business

Mixed day of stock market trading as investors weigh inflation data against US bank earning reports

Euronext Dublin was flat as the week drew to a close but other European markets gained

Wall Street’s main indexes dipped on Friday, as investors assessed a mixed bag of earnings reports from big lenders. Photographer: Michael Nagle/Bloomberg

Ellen O’Regan
Fri Jan 12 2024 - 18:55

Trading was flat in Dublin on Friday, lagging behind gains in other European markets. Globally, investors digested positive indications regarding inflation and interest rate directions, but a spate of mixed earnings reports from US banks may have weighed on market sentiment.

Dublin

Euronext Dublin was flat overall on Friday, gaining just 0.08 per cent to close at 8,417.55.

Among the banks, AIB fell by 1.25 per cent to close at €3.79, while Bank of Ireland lost 0.07 per cent to close at €8.31, and Permanent TSB dropped 0.59 per cent to €1.69.

Home builder Cairn Homes gained 1.51 per cent to close at €1.34, while peer Glenveagh Properties was flat on the day, closing at €1.19. Meanwhile, building materials company Kingspan rose by 1.65 per cent to close at €75.02.

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Paddy Power parent company Flutter Entertainment was up 0.95 per cent by close of day, to €148.35, while budget airline Ryanair fell by 1.36 per cent to close at €18.15.

Food company Kerry Group fell by 0.47 per cent to €75.56, while peer Glanbia gained 0.40 per cent to close at €15.16.

Packaging company Smurfit Kappa rose by 0.77 per cent to close at €35.11, while Donegal Investment saw shares rise by 9.09 per cent to €18.00.

London

UK stocks rose on Friday, as investors were boosted by data showing that the UK economy rebounded in November.

The export-heavy FTSE 100 Index gained 0.64 per cent to close at 7,624.93, while the more domestically focused FTSE Mid-Cap 250 Index rose by 0.47 per cent to 19,197.62.

Figures from the UK’s Office for National Statistics showed that the economy grew slightly more strongly than expected in November, although the weakness in previous months still leaves it at high risk of slipping into a recession.

Burberry shares dropped 5.51 per cent after the British luxury fashion brand warned its full-year results would fall below its previous guidance after a further slowdown in its key December trading period.

London-headquartered Endeavour Mining jumped to the top of the FTSE 100, as the mining company gained 3.79 per cent. Precious metal miners were boosted by higher gold prices as global strikes on Yemen added to fears of further escalation in the Middle East conflict.

Europe

European shares gained on Friday in the wake of positive indications from the European Central Bank on interest rate cuts.

ECB president Christine Lagarde said on Thursday the “hardest and worst bit” regarding inflation was likely over and that interest rates would be cut if inflation falls to the 2 per cent level.

The pan-European Stoxx 600 Index gained 0.77 per cent to 476.42, while the German Dax index rose by 0.95 per cent to 16,704.56 and the French Cac 40 Index was up 1.05 per cent to 7,465.14.

Among stocks, Airbus rose 3.7 per cent after the plane maker reported record annual jet orders and confirmed an 11 per cent rise in 2023 deliveries.

As Burberry shares declined in London, other European luxury stocks also sagged, with LVMH down 0.34 per cent and Christian Dior losing 1.32 per cent.

Shares in Adyen were up 2.92 per cent after Goldman Sachs raised their target price on the payment solutions firm, making it the best performer on the Dutch blue-chip AEX index, which gained 0.95 per cent.

New York

Wall Street’s main indexes dipped on Friday, as investors assessed a mixed bag of earnings reports from big lenders, and a softer-than-expected inflation report that may boost hopes for an early start to interest rate cuts by the Federal Reserve.

Producer price data showed that prices unexpectedly fell by 0.1 per cent in December amid a decline in the cost of goods, while prices for services were unchanged. Friday’s data contrasted with a report on Thursday showing consumer prices rose more than expected last month.

Bank of America slipped after its fourth-quarter profit shrank, as the lender took $3.7 billion (€3.38 billion) in one-off charges.

Wells Fargo dropped, as it beat profit expectations on cost cuts, but warned that 2024 net interest income could be 7 per cent to 9 per cent lower year-on-year.

JPMorgan Chase also fell, reversing gains earlier in the day when it reported its best-ever annual profit and forecasting higher-than-expected interest income for 2024.

Citigroup declined after gaining earlier on Friday, as it reported a $1.8 billion (€1.64 billion) fourth-quarter loss. The lender also expects to further reduce its headcount. – Additional reporting: Reuters

Ellen O'Regan

Ellen O’Regan

Ellen O’Regan is an Irish Times journalist.

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