Business

Europe’s Stoxx 600 at two-week low in broader market decline

Utilities, retail and telecommunications were the worst-hit sectors, down between 1.6% and 2.2%

Wall Street’s main stock indexes rose on Friday after a strong jobs report that also suggested easing wage pressures. Photograph: Getty

Eoin Burke-Kennedy
Fri Apr 5 2024 - 18:55

An overall market decline dragged Europe’s benchmark stock index to a more than two-week low on Friday following hawkish comments from some Federal Reserve officials, a spike in Middle East tensions and hotter-than-expected US jobs data.

The continent-wide Stoxx 600 fell 0.9 per cent, logging its worst day since early February. For the week the index dropped 1.2 per cent, its worst weekly drop since mid-January.

Utilities, retail and telecommunications were the worst-hit sectors, down between 1.6 per cent and 2.2 per cent. Benchmark indexes across all major European economies such as Germany, France, Italy and Spain fell over 1 per cent each.

Fresh data showed much higher-than-expected US non-farm payrolls for March, potentially delaying anticipated Federal Reserve rate cuts this year. The central bank’s policymakers also struck a hawkish chord before and after the data.

READ MORE
DUBLIN

AIB was up 1.8 per cent to €5.03 after it emerged the bank was planning an offer to buy out thousands of legacy shareholders with small holdings whose stakes were catastrophically diluted by the bank’s crisis-era bailout – but who still account for almost 90 per cent of registered shareholders. Rival Permanent TSB rose by 4.7 per cent to €1.57. Insulation maker Kingspan rose by 1 per cent to €84.85.

In line with market declines across Europe, Ryanair and Smurfit Kappa fell by 0.8 per cent and 0.2 per cent.

EUROPE

European equities were already under pressure since early trade following hawkish comments from Fed officials and a spike in Middle East tensions.

Back home data showed euro zone retail sales dropped 0.7 per cent on an annual basis, less than the 1.3 per cent decline expected by economists polled by Reuters.

Shares of SoftwareOne dropped 1 per cent after it announced all proxy advisers were now against the complete replacement of the Swiss firm’s board of directors.

Holcim lost 0.5 per cent after the Swiss building materials company said it will buy Tensolite, which makes and distributes precast concrete systems in South America.

Bureau Veritas shed 0.7 per cent after French investment firm Wendel said it sold 9 per cent of shares in the business support company.

Shell said it expected significantly lower results from its liquefied natural gas trading business in the first quarter of 2024 from the previous three months. However, its shares rose 0.6 per cent due to higher oil prices.

LONDON

The UK’s main stock indexes recorded weekly losses on Friday against a backdrop of escalating Middle East tensions and a more cautious mood among investors following hawkish remarks from Federal Reserve officials.

The exporter-heavy FTSE 100 shed 0.8 per cent, while the domestically-focused FTSE 250 lost 0.7 per cent. However, both the indexes picked up from their session lows after a stronger-than-expected US jobs report raised hopes of a soft landing.

British house prices fell 1 per cent in March, their first drop since September 2023, figures from mortgage lender Halifax showed.

Among individual stocks Rio Tinto slipped 2.4 per cent after shareholders demanded the company come clean on environmental issues. Ocado Group slid almost 9 per cent, extending losses for a second session, after the online supermarket announced chairman Rick Haythornthwaite would step down.

NEW YORK

Wall Street’s main stock indexes rose on Friday after a strong jobs report that also suggested easing wage pressures, boosting the chances of a soft landing for the US economy.

US employers hired far more workers in March than expected and continued to lift wages at a steady pace, suggesting the economy ended the first quarter on solid ground, and potentially delaying the widely expected interest rate cuts by the Federal Reserve.

However, the annual increase in wages slowed in March from the previous month, while the rise in average hourly earnings came in line with estimates, according to economists polled by Reuters.

Tesla was an outlier among advancing growth stocks, down 2.4 per cent after the electric carmaker cancelled its inexpensive car that was expected to drive its growth into a mass-market automaker, according to three sources familiar with the matter and company messages seen by Reuters.

Krispy Kreme gained 4.7 per cent after Piper Sandler upgraded the doughnut chain to “overweight” from “neutral”. Shockwave Medical gained 1.8 per cent after Johnson & Johnson agreed to buy the medical device maker for $12.5 billion. – Additional reporting Reuters

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times

LATEST STORIES