Interest rates and Chinese economy weigh on investor sentiment

Stocks slumped across international markets on Friday, led by higher global interest rates which continue to weigh on the equity market and looming concerns about China’s property crisis.

Dublin

The Irish stock market rallied into the close on Friday afternoon, but the ISEQ All Share still finished down 1.05 per cent, mirroring a weak day across Europe.

Cavan-based insulation specialist Kingspan was in the spotlight as the group reported a first-half trading profit of €436 million, in line with guidance given in July and just above last year’s record result of €434 million for the first half. Kingspan closed up 0.63 per cent as chief executive Gene Murtagh said he was “pleased with a strong first-half performance in a testing environment”.

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Irish banks were running weaker as AIB was down 2.31 per cent and shares in Bank of Ireland fell by 1.32 per cent. Permanent TSB finished up 0.93 per cent.

Irish renewables investment company Greencoat was down 2.06 per cent by closing, as rising rates continue to impact on the attractiveness of investment yields and weigh on the company’s stock.

Healthcare group Uniphar finished down 6.38 per cent, while medical technology company Healthbeacon lost 5 per cent.

Glanbia finished out the day up 1.34 per cent, as an upgrading by broker Morgan Stanley on Friday added to momentum from results published by the group on Wednesday.

London

UK stocks fell on Friday, led by declines in retailer shares. Sales data for July showed that domestic retail sales fell by 1.2 per cent last month, double the forecasted fall of 0.6 per cent.

The gloomy retail sales data came days after inflation and wage growth data showed inflationary pressures persisted, opening the doors for further rate hikes by the Bank of England.

The exporter-heavy FTSE 100 fell 0.65 per cent, while the mid-cap FTSE 250 was down 1.41 per cent.

Industrial metal miners fell 1.7 per cent, off the back of concerns of weak demand outlook from top metals consumer China. Worries over China’s property crisis and weakening economy deepened on Friday, as developer China Evergrande Group filed for bankruptcy protection in a US court.

Shares of industrial and electronic products distributor RS Group were down 3.57 per cent after brokerage UBS downgraded the stock.

Europe

European stocks fell on Friday to their lowest level in more than five weeks, fed by concerns over higher interest rates and the Chinese economy.

Extending a drop into a fourth session, the Stoxx 600 Index was down 1 per cent at lunchtime as miners, retailers and real estate stocks fell.

Dino Polska dropped after the Polish supermarket operator’s earnings missed expectations, while Swiss semiconductor device maker u-blox Holding AG saw share prices fall after cutting its full-year guidance.

US

Wall Street’s main indexes opened lower as the three main US stock indexes were on track for sharp weekly losses.

Shares of luxury ecommerce retailer Farfetch tanked to a record low as the company delivered weaker than expected guidance. The company projected total gross merchandise value to be about $4.4 billion (€4.05bn) for 2023, compared with prior expectations of $4.9 billion. Demand in the retailer’s top two markets, the United States and China, drove a gloomy annual sales outlook as stockists cut back on orders for the autumn and winter seasons due to leftover inventories. Analysts at JP Morgan and Keybanc downgraded their ratings on the stock, and at least six brokerages have cut their price targets on Farfetch.

Rate-sensitive big technology and growth stocks such as Apple, Microsoft, Tesla and Nvidia slipped as the tech-heavy Nasdaq hit an over two-month low.

Hawaiian Electric shares jumped amid growing scrutiny over its role in the Maui wildfires, but the utility firm said that its goal was not to restructure the company.

Estee Lauder shares fell after the cosmetics maker forecast its annual net sales and profit below estimates.

Meanwhile, shares of cryptocurrency firms such as Coinbase Global, Bitfarms and Riot Platforms all fell as bitcoin hit a fresh two-month low.