European shares drop for fifth day amid mounting recession concerns

European equities declined for a fifth straight session on Thursday, with banks and consumer staples standing out as weak spots, amid mounting concerns about an impending recession.

The pan-European Stoxx 600 slipped 0.2 per cent, with investors jittery ahead of a slew of interest rate decisions from major central banks, including the US Federal Reserve and the European Central Bank (ECB) next week.

“We’re in a wait-and-see mode at the moment. Next week is a huge week for all markets and that is really going to set the tone between now and year-end,” said Hugh Gimber, global market strategist at JP Morgan Asset Management in London.

“There is a little bit too much excitement in the market at the moment as to how quickly the central banks are going to be able to slow the pace of tightening because inflation is still too high,” he said. “That’s very, very clear in both the euro zone and the UK.”

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Dublin

The Iseq overall index declined by 0.4 per cent to 7,171.92, with CRH declining by 1 per cent to €36.92 and Smurfit Kappa losing 1.3 per cent to €34.74 as investors kept their focus on the global economic outlook.

Even a solid set of earnings from DS Smith, a peer of Smurfit Kappa, failed to ignite interest in the Irish cardboard box maker.

While Ryanair advanced in early trading as the carrier confirmed that chief executive Michael O’Leary had extended his contract out to 2028, the stock fell back as the session went on, to close down 0.2 per cent to €12.88.

Banking stocks were mixed, with AIB up 1.3 per cent, while Bank of Ireland lost 0.1 per cent.

London

The FTSE 100 fell by 0.3 per cent after some downbeat company updates and as investors await key central bank meetings next week.

Frasers Group slumped 9 per cent to the bottom of FTSE 100 after the sportswear and clothing firm warned of a challenging and uncertain outlook despite an upbeat half-yearly profit.

The London Stock Exchange Group slid by 6.4 per cent after UBS downgraded its stance on the stock to neutral, the equivalent of a hold recommendation.

Meanwhile, BAT dropped 3.1 per cent after the tobacco firm said it expects net finance costs to top £1.6 billion pounds ($1.86 billion) in 2022.

Wizz Air gained 4.3 per cent after BofA Global Research upgraded the stock to buy as it forecast a rebound in travel demand.

Europe

French automaker Renault fell 1.3 per cent, as talks between Renault and Nissan over restructuring of an alliance between the two groups are certain to spill into next year, Bloomberg reported on Thursday.

China’s loosening of its strict Covid-19 curbs boosted sectors such as energy and miners, which rose 0.2 per cent and 1.2 per cent, respectively, tracking oil and metal prices higher.

New York

The S&P 500 index was higher in early afternoon trading on Wall Street, boosted by technology shares, while a rise in weekly jobless claims suggested the labour market was slowing down.

Wall Street’s main indexes have come under pressure in recent days, with the benchmark shedding 3.6 per cent in the past five sessions on expectations of a longer rate-hike cycle and downbeat views on the economy from some top company executives.

Energy stocks rose 0.2 per cent as oil prices climbed following the easing of anti-Covid measures in China and delay in some tankers carrying Russian oil.

Most mega-cap technology and growth stocks such as Apple, Nvidia and Amazon.com rose between 1.3 per cent and 4 per cent.

Moderna soared 4 per cent after the US Food and Drug Administration authorised Covid-19 shots from the vaccine maker that target both the original coronavirus and Omicron subvariants for use in children as young as six months of age.

Rent the Runway jumped more than 50 per cent after the clothing rental firm raised its 2022 revenue forecast. – Additional reporting: Reuters.