Euro-zone blue-chip values slip as tech shares pressured in advance of release of minutes from US Fed meeting

Euro-zone blue-chip stocks fell on Wednesday as tech shares were pressured in advance of the release of minutes from the US Federal Reserve’s June policy meeting, while weak data from the single-currency bloc and China stoked fears of a sharp hit to global growth.

DUBLIN

AIB and Bank of Ireland were marginally up as markets and investors speculated where the European Central Bank was taking interest rates while Permanent TSB lost further ground, dropping 3 per cent to €2.19.

After announcing on Tuesday it expects its full-year operating profit to rise to up to €110 million, as increased home sales offset the effect of inflation on construction, Cairn Homes fell 3 per cent to €1.12. Rival Glenveagh Properties also lost ground, falling 2 per cent, on a bad day for property stocks.

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In keeping with the gloomier sentiment across global markets, Iseq heavyweights Flutter, Ryanair, Smurfit Kappa and CRH all lost ground.

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LONDON

London markets slumped on Wednesday after new data showed wage rises were still driving up costs across the services sector, a closely followed index for Bank of England policymakers. The purchasing managers’ index showed that businesses topping up salaries were offsetting declines in fuel and electricity costs. It could prompt more interest rate hikes to get inflation under control, economists suggested.

Meanwhile, investors appeared to be nervous in advance of the Federal Reserve’s meeting minutes which were published after markets closed and will give an indication of the US’s inflation forecast and path for future interest rates.

The downbeat mood meant London’s FTSE 100 sank more than 1 per cent on Wednesday after narrow losses earlier in the week.

In company news, JD Sports Fashion saw its share price slip after being found to have colluded with Leicester City FC to restrict competition in selling club clothing, including replica kits. The anti-competitive behaviour resulted in an £880,000 (€1.02 million) fine for the football club, said the UK’s competitions watchdog. But JD avoided a fine because it reported the illegal activity. Nevertheless, its share price closed 1.7 per cent lower.

Shares in fashion retailer Quiz tumbled after the chain warned investors it was facing tough trading conditions as shoppers come under pressure from inflation. The company posted a jump in profits for the past year but a fall in revenues in recent months, amid the challenging backdrop.

EUROPE

Insurers fell 1.9 per cent, hurt by comments from Italy’s economy minister, Giancarlo Giorgetti, who urged the need for industry rules to avoid any further crisis similar to that of Italian life insurer Eurovita.

The technology sector dropped 1.4 per cent, as shares of Swiss sensor maker AMS Osram fell 13.5 per cent, clocking its worst day since February on concerns that China’s export curbs on gallium could negatively affect its supply chain.

Carmakers were among rare gainers, up 0.5 per cent, as Sweden-based Volvo Cars rose 0.4 per cent after reporting a 33 per cent year-on-year rise in June sales volume. Evotec rose 2.7 per cent as the German biotech firm won a $74 million (€67.3 million) contract with the US Department of Defence to develop drugs targeting orthopoxviruses.

NEW YORK

Wall Street’s main indices fell in advance of the Federal Reserve meeting minutes release, while weak US and China economic data as well as rising Sino-US tensions also dented investor sentiment. May US factory orders rose less than expected, according to a commerce department report, fanning fears of a slowdown due to high interest rates after data on Monday showed manufacturing slumped further last month.

Investors are focused on the Fed minutes for clues on the central bank’s monetary policy path. More economic data, including the non-farm payrolls, is scheduled for release later this week that could help determine the Fed’s rate trajectory.

Chip stocks Intel and Micron Technology fell 2 per cent each after China said it would control exports of some metals widely used in the semiconductor industry as tensions between Beijing and Washington rise over access to high-tech microchips.

Meta Platforms rose 3.4 per cent, outpacing its mega-cap tech and growth peers, in advance of the expected release of its Twitter-rival app, Threads, on Thursday. “Investors can’t help but be a little excited about the prospect that Meta really has a ‘Twitter-Killer’ poised to launch on the app store,” said Danni Hewson, head of financial analysis at AJ Bell.

United Parcel Service slid 1.5 per cent after the Teamsters Union and the postal service operator accused each other of walking away from negotiations over a new contract. — Additional reporting by Reuters