Stocks fluctuate as recession risks rise

Global equities fluctuated on Tuesday as investors continued to weigh the prospect of a recession in the United States and more Covid curbs in China.

The US treasury yield curve inversion, which analysts say is a key recession warning, deepened to levels last seen in 2007, underscoring fears that Federal Reserve rate hikes will sink the economy into a recession.

The euro, meanwhile, came within a hare’s breath of achieving parity with the dollar before bouncing back.

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After a choppy start to the week and to Tuesday, the Iseq index was up 0.4 per cent to finish at a session high. Traders say Tuesday’s session was a game of two halves with stocks opening lower before beginning to rally after lunch. What traders describe a pan-European “relief rally” in airline shares after a difficult few sessions helped buoy Ryanair’s share price, which climbed 2.8 per cent to close the session at €11.84.

Among the other winners were Smurfit Kappa, which recovered the 2.5 per cent it had surrendered on Monday to close at €31.83 and housebuilder Glenveagh, up 2.2 per cent to €0.99. Other building and construction-related stocks like Cairn Homes and CRH also finished in the green.

Moving in the opposite direction were the main Irish banks with Permanent TSB the biggest overall loser of the session. Down 3.8 per cent, the bank finished the day at €1.26 at closing bell, having traded at €1.50 in June. Bank of Ireland was down 1.7 per cent to €5.80 and AIB lost 1.4 per cent to finish at €2.13.

LONDON

Shares in London held largely flat today with the airline sector’s performance helping to cancel out a poor day for oil companies. The FTSE 100 gained 0.18 per cent despite the likes of BP and Shell finishing in the red as oil futures sank.

Aer Lingus-owner IAG was the session’s biggest winner, up 6.5 per cent to 110.42p. EasyJet also benefited from a broad relief rally in airline stocks, gaining 2.8 per cent to finish at 369.4p.

The biggest risers on the FTSE 100 were IAG, up 6.74p to 110.42p, Coca-Cola HBC, up 67p to 1,928p, Melrose Industries, up 4.95p to 159.9p, Intermediate Capital Group, up 40p to 1,379.5p, and St James’s Place, up 28.5p to 1,169p.

Woodies DIY-owner Grafton Group shed 0.9 per cent despite publishing a positive trading update.

The biggest fallers on the FTSE 100 were Dechra Pharmaceuticals, down 114p to 3,520p, Aveva Group, down 60p to 2,300p, BP, down 7.6p to 377.05p, Land Securities, down 12.6p to 662.4p, and British Land, down 8.3p to 454.5p.

The biggest fallers on the FTSE 100 were Dechra Pharmaceuticals, down 114.0p to 3,520p, Aveva Group, down 60p to 2,300p, BP, down 7.6p to 377.05p, Land Securities, down 12.6p to 662.4p, and British Land, down 8.3p to 454.5p.

EUROPE

After opening lower this morning, European stocks largely held their own in trading with cross-Continent Euro Stoxx 600 index up more than 0.4 per cent at the closing bell, regaining much of yesterday’s lost ground.

The French Cac40 and the German DAC indices gained 0.9 and 05 per cent respectively.

Among the biggest movers, Électricité de France (EDF) added more than 6 per cent following reports that the French government will pay more than €8 billion to nationalise the company.

Spanish banks Caixabank and Sabadell were down between 7 and 8 per cent after the Spanish government announced a surprise tax on financial institutions.

NEW YORK

In advance of what’s expected to be a difficult earnings season, US stocks declined on Tuesday with both the Nasdaq and the S&P 500 losing ground.

Recovering somewhat following the news that Elon Musk has terminated his bid for the social media company, Twitter’s share price climbed 3.5 per cent to finish the session at $33.78. Tesla, meanwhile, moved in the opposite direction, finishing the day in the red at $702.06

PepsiCo raised its full-year revenue forecast, helped by sustained demand for its sodas and snacks, sending the company’s shares up 0.5 per cent.

Fashion retailer Gap slid 5.6 per cent after the clothing retailer said its CEO would step down and its margins would stay under pressure in the second quarter as costs spiral.

Focus is now on inflation data on Wednesday that is expected to show US consumer prices rose 8.8 per cent in June from a year earlier, marking a fresh four-decade high and adding more pressure on the U.S. Federal Reserve to act on soaring prices.

— Additional reporting: Bloomberg/Reuters/PA