European shares fell for a fourth straight session on Wednesday, with investors on edge as fears of a global recession picked up steam, although the losses were limited by gains for healthcare stocks.
A recent rally in equities driven by hopes of a less aggressive Federal Reserve has been tested in recent days after US data pointing to economic strength spurred fears that the central bank could keep hiking interest rates for longer.
The Iseq closed down 0.3 per cent in line with the nervous mood across Europe. Building materials group CRH fell 1.2 per cent at €37.30, while Ryanair slipped 0.7 per cent to €12.90.
Smurfit Kappa added 1.4 per cent to €35.30 as the packaging company began buying back up to 1.2 million ordinary shares as part of a buyback programme to mitigate the dilution of shares issued as part of an incentive plan earlier this year. The repurchased shares will be cancelled.
It was a strong session for the banks, going against the trend in Europe, with Bank of Ireland adding 1 per cent to €8.06 and AIB climbing 3 per cent to €3.15. But Paddy Power owner Flutter Entertainment was among the fallers, declining 1.6 per cent to €137.40.
Britain’s FTSE 100 slipped 0.4 per cent, dragged down by cyclical sectors amid growing worries about a recession, while GSK marked its best day since 2008 after the dismissal of US lawsuits relating to heartburn drug Zantac.
GSK jumped 7.5 per cent after the drugmaker was spared thousands of US lawsuits claiming that the heartburn drug Zantac caused cancer.
The pharmaceutical sector rose 2.7 per cent, posting its biggest one-day percentage gain in almost five months.
Mitchells & Butlers gained 6.5 per cent after the pub and restaurant group posted a 53 per cent jump in annual profit as it said recent sales in the new fiscal year were encouraging.
However, the FTSE 250 midcap index dropped 0.9 per cent, while on the blue-chip index, declines were led by oil and gas companies, industrial mining stocks, chemicals companies and banks.
The region-wide Stoxx 600 fell 0.6 per cent amid a sense of jitteriness the morning after a sell-off on Wall Street, which was triggered by big US banks cautioning of a likely recession next year.
Energy stocks led declines, falling 2 per cent as crude prices slid after US data showed an unexpectedly large build in fuel stocks, feeding fears about demand in a market already spooked by an uncertain economy. Banks fell for their third straight session, also weighing on the Stoxx 600.
Among individual stocks, Airbus fell 2.2 per cent as the world’s largest planemaker abandoned a numerical forecast for jet deliveries and a date for its key production goal.
Euro zone gross domestic product grew slightly more than initial estimates, Eurostat data showed, with household spending and business investment propping up the economy.
Wall Street’s main indexes struggled for direction in early trading on growing fears that the Federal Reserve’s monetary policy tightening could trigger a recession and hit corporate earnings, while Apple and Tesla were the biggest drags on the Nasdaq.
The Nasdaq was down for the fourth straight session, dragged lower by a 1.3 per cent drop in Apple after Morgan Stanley’s iPhone shipment target cut and a 3.9 per cent fall in Tesla over production loss worries.
Markets have also been rattled by downbeat comments from top executives at Goldman Sachs Group, JPMorgan Chase and Bank of America on Tuesday that a mild to more pronounced recession was likely ahead.
Carvana was down 30.6 per cent after analysts at Wedbush downgraded the used-car retailer’s stock to “underperform” from “neutral” and slashed its price target to $1.
The CBOE volatility index, also known as Wall Street’s fear gauge, rose to a two-week high.
– Additional reporting: Reuters