Business

Shares flatten out in Europe as traders look to ECB rate cut in June

Dublin market ends the week 1% lower while London’s FTSE 100 closes on a near-record high

European markets were little changed as tensions over Middle East dampened optimism. Photograph: Kirill Kudryavtsev/AFP via Getty Images

Ciara O'Brien
Fri Apr 12 2024 - 18:34

European shares were flat on Friday after hitting a one-week high in early trade, as rising tensions in the Middle East eroded some of the continued optimism around the European Central Bank’s hint of imminent rate cuts.

Dublin

The Dublin market edged lower on Friday, closing the session around 1 per cent lower.

The index was weighed down by a decline in shares in Ryanair, which fell 2.64 per cent over the session. That followed a fall of more than 3 per cent in the stock the previous day. Other fallers included Bank of Ireland, which was down half a per cent to €9.77, and AIB, which lost 0.8 per cent over the session to end at just below €4.80.

Packaging giant Smurfit Kappa gave up some of its gains from the previous session, falling 0.6 per cent to end the week at €41.39.

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Kerry Group was among the few climbers on Friday, making a marginal gain of 0.19 per cent after the previous session’s 2.75 per cent rise.

London

Britain’s FTSE 100 rose to a near-record closing high on Friday as soaring commodity prices lifted mining and oil stocks, while data showed Britain’s tepid economy is on course to exit a shallow recession.

The resources-heavy index breached the 8,000 mark at one point before closing 0.9 per cent higher at 7,995.58, not far from its all-time closing peak of 8,014.31 set in February 2023.

BP advanced 3.7 per cent after Reuters reported the United Arab Emirates’ state-owned oil company recently considered buying BP, though the deliberations did not progress beyond preliminary discussions.

Britain’s mid-cap FTSE 250 index slipped 0.3 per cent, with airline operator Wizz Air tumbling 8.2 per cent on concerns about higher fuel costs.

Other airline stocks including EasyJet and British Airways owner IAG fell 4.3 per cent and 3.8 per cent, respectively. R&Q Insurance slumped 45.4 per cent to a record low after the Bermuda-based insurer said it anticipates a significant annual pretax loss.

Europe

The pan-European STOXX 600 ended the session 0.1 per cent higher, after rising as much as 1.2 per cent during the day, but logging its second straight weekly decline.

Luxury giants LVMH and Richemont lost 1.2 per cent and 3 per cent, respectively, weighing on the STOXX 600. The broader luxury sector shed 1.3 per cent to a near two-month low.

Orsted climbed 4.5 per cent, while Evotec rose 3.5 per cent after Deutsche Bank upgraded the German biotech firm to “buy” from “hold”.

Societe Generale gained 2.1 per cent after the lender agreed to sell Société Générale Marocaine de Banques and La Marocaine Vie to Moroccan conglomerate Saham Group for €745 million.

Varta slumped 31.1 per cent after the German battery maker said its restructuring plans would fail to make it profitable by 2026.

New York

The blue-chip Dow and the S&P 500 were on track for weekly losses on Friday after most megacap growth stocks and chipmakers retreated, while some big banks fell after reporting dour quarterly earnings.

JPMorgan Chase dropped 5.9 per cent after the bank’s forecast for its income from interest payments came in below analysts’ expectations. Citigroup lost 2.8 per cent after its first-quarter profit fell.

The S&P 500 banks index shed 3.3 per cent, hitting its lowest level in nearly a month.

Falling megacap growth stocks weighed on the three indexes, with Nvidia, Tesla and Meta Platforms down more than 1 per cent each.

Advanced Micro Devices and Intel lost 4 per cent and 3.6 per cent, respectively, after a report that Chinese officials had told the country’s largest telecom firms earlier this year to phase out foreign chips that are key to their networks by 2027.

– Additional reporting: Reuters

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist

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