Markets roiled by fears over inflation and further steep interest rate hikes

Iseq in Dublin falls heavily, with Bank of Ireland prominent in a sea of red

European shares tumbled on Thursday as relief at the Bank of England’s bond buy-back plan to soothe distressed markets fizzled out, while grim inflation data from Germany fed fears about soaring prices and aggressive central bank moves.

In the US, Wall Street tumbled on worries of a global economic downturn from aggressive central bank policy and fears that a rout in global currency and debt markets could spillover to stocks.

Dublin

The Iseq fell sharply, finishing the session down 3.3 per cent.

The big banks helped to drag it down. Bank of Ireland slumped by more than 6.4 per cent to €6.26, after the Central Bank fined it more than €100 million over its handling of the tracker mortgage scandal. The other banks were also in the red. AIB was down 3 per cent to €2.32, while Permanent TSB fell more than 6.7 per cent to €1.52.

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It was also a tough day for travel-related stocks, as investors fretted about consumer spending. Dalata, the State’s biggest hotel group, fell 5.1 per cent to €2.78, while Ryanair was down 3.6 per cent to €10.46.

London

London stocks sank on broad-based losses, with the mid-caps index plunging 3.1 per cent, as worries about fallout from the UK government’s new economic plan continued to roil markets. The blue-chips index lost 1.8 per cent as banks and consumer staples weighed. It is set for its third straight weekly fall.

Shares of Next slid 12.2 per cent after it cut profit and sales forecasts, while British American Tobacco fell 3.6 per cent in ex-dividend trading. Synthomer tanked 35 per cent after it lowered annual profit outlook.

Shares in Mitchells & Butlers slid after the pubs and bars giant cautioned over disrupted sales from the summer heatwave and rail strikes. The All Bar One owner said cost inflation had put pressure on margins, but it still posted growing sales after the past quarter. Its share price was down by almost 15 per cent at the end of the day.

Europe

Nearly all Stoxx sectors were in the red, with retailers sliding 4.4 per cent as the world’s second-biggest fashion chain, Swedish group H&M, fell 5.9 per cent after weaker-than-expected profits

Germany’s Dax index was down 1.7 per cent as data showed inflation in Europe’s largest economy jumped by more than expected in September to a 10.9 per cent rise on the year — its highest level in more than 25 years, driven by higher energy prices.

Luxury stocks on the Stoxx 600 were in the red with LVMH down 0.9 per cent.

Volkswagen and Porsche SE slumped as investors switched to Porsche AG shares, which made a strong debut, peaking at €86.76.

New York

The Nasdaq fell 3 per cent due to losses in megacap growth names such as Amazon, Apple, Microsoft, Meta Platforms and Tesla. They were down between 3.09 per cent and 6.25 per cent.

The S&P 500 slipped to its lowest level since November 30th, 2020, and was now set for a monthly decline of nearly 8 per cent.

All of the 11 S&P 500 sector indexes were down between 1 per cent to 3 per cent, with consumer discretionary leading the slide as automobile stocks slumped.

CarMax slumped 23.72 per cent after the used-car retailer missed expectations for second-quarter results, hurt by consumers cutting spending amid inflation, rising interest rates and higher car prices. General Motors and Ford Motor also took a hit, dropping about 5.5 per cent each.

Airline carriers and cruise operators fell on cancelling or delaying trips after Hurricane Ian hit Florida’s gulf coast with catastrophic force. American Airlines fell 4.3 per cent, while United Airlines Holdings, Southwest Airlines and Delta Air Lines fell between 2.3 per cent and 3.9 per cent. Cruise companies Norwegian Cruise Line Holdings and Carnival fell 4.3 per cent and 5.7 per cent, respectively. — Additional reporting: Reuters/PA

Mark Paul

Mark Paul

Mark Paul is Business Affairs Correspondent of The Irish Times. He also writes the Caveat column