Global equities mixed after initially sliding on concerns about high interest rates

Global equities were mixed after initially sliding on concerns about high interest rates putting pressure on the financial system. Reaction to Italy’s election result, where a right-wing alliance won a clear majority, was muted. A top official at the US central bank warned that the UK’s new fiscal plan raised the odds of a global recession.

Dublin

On the Dublin market, stock closed the day marginally lower, losing just over half a per cent. The Euronext Dublin ended the session at 6404, dragged lower by banking and travel stocks.

AIB fell 4 per cent to €2.39, while Bank of Ireland was down almost 4.5 per cent to €7.15. Permanent TSB shed 1.8 per cent to close the day at €1.64.

Ryanair shares continued to edge lower, ending the day at €10.84, some 1.95 per cent off. That followed a 4 per cent on Friday. Smurfit Kappa, meanwhile, closed at €28.98, losing 2.3 per cent.

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On the positive side, Kingspan rose 1.18 per cent, while Paddy Power owner Flutter Entertainment was up 2.4 per cent.

London

The pound hit headlines again on Monday after plummeting to a record low against the dollar overnight, sending shockwaves across the economy, but London’s leading index remained fairly unchanged.

Sterling hit its lowest level against the dollar since decimalisation in 1971, falling by more than 4 per cent to just 1.03 dollars in early Asia trading. It regained ground later on in the day, recovering to around 1.07 dollars when European markets closed, despite the Bank of England quashing speculation that it might announce an emergency interest rate hike to steady the pound.

While the pound plummeted, the FTSE 100 was relatively stable by the time markets closed on Monday. The index hit lows of around 6,939 in the morning but was 2.35 points higher, or 0.03 per cent, at 7,020.95 when European markets closed..

Shares in Unilever rose 1.8 per cent on Monday after boss Alan Jope announced plans to stand down at the end of 2023 after five years as chief executive and 35 years with the group. The FTSE-100 listed company said it has begun looking for his successor.

Meanwhile, shares in UK car dealership Pendragon were up by 19 per cent on Monday after the group announced a preliminary takeover offer from its largest shareholder Hedin Group. The Swedish motor company could buy out the entirety of Pendragon’s share capital at 29 pence per share in a deal valued at around £400 million.

On the flip side, resale platform Music Magpie saw its shares plummet by around two-thirds after it downgraded its profit and revenue expectations as it prepares for a worse-than-anticipated Black Friday sales period. Shares were down by 68 per cent when markets closed.

Europe

The Europe-wide STOXX 600 index fell 0.4 per cent, closing near December 2020 lows following a sharp sell-off last week when data showing a downturn in economic activity in the region and tightening by several global central banks deepened fears of a recession.

Elsewhere in Europe, the German Dax was down by 0.46 per cent and the French Cac 40 had dipped by 0.24 per cent.

Traders bet a UK interest rate hike could be imminent after the pound plunged to a record low against the dollar in the wake of a poorly received fiscal package on Friday.

Italy’s FTSE MIB index was up 1 per cent, boosted by financial stocks, after the centre-right coalition won a clear majority in both houses of parliament, potentially giving Italy a rare chance of political stability after years of upheaval and fragile coalitions.

New York

US stocks were mixed, oil prices were choppy, and the dollar and Treasury yields rose on Monday as Wall Street digested a raft of macroeconomic news.

US stocks were mixed to start the week – the Dow Jones Industrial Average dipped about 0.5 per cent and the S&P 500 fell about 0.3 per cent, while the Nasdaq Composite gained 0.4 per cent.

Oil prices hit nine-month lows on Monday before recovering to stand higher on the day in choppy trade as recession fears and a strong dollar spooked the market where participants were waiting for details on new sanctions on Russia.

Brent crude futures for November settlement were up about 0.9 per cent, at $86.95 a barrel, having earlier fallen as far as $84.51, the lowest since January 14th. – Additional reporting: Reuters

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