European and global shares trod water on Wednesday in advance of the US Federal Reserve’s latest decision on interest rates.
Banking stocks were in the spotlight again as shares in financial institutions gave back some of the gains made in recent sessions following the cobbling together of UBS’s €3 billion deal for Credit Suisse over the weekend.
Slightly out of sync with its European counterparts, the Iseq index gave back 0.5 per cent after outperforming on Tuesday with a 2.5 per cent gain. Traders in Dublin said that while price volatility has been a feature of recent sessions, trading volumes have remained fairly stable despite the rapidly shifting narratives around bank stocks.
But volatility was still in evidence on Wednesday. Shares in Bank of Ireland, down to €9.70 in the morning, went as high as €10.16 per share at one point, finishing the day at €9.85 per share, representing a 0.3 per cent drop. Shares in AIB, meanwhile, were down 1.7 per cent to €3.90, while Permanent TSB lost 1.6 per cent to close at around €2.50.
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Marginal downward moves by the larger caps weighed on the index, with Ryanair down 0.3 per cent to €14.95 per share, and Smurfit Kappa down by around 0.5 per cent to €33.47. Meanwhile, Paddy Power-owner Flutter and Kingspan both fell by 1.2 per cent to €160.55 and €61.62 per share.
Moving up the table, Kenmare Resources added 8 per cent, albeit on low volumes in Dublin, after publishing annual results showing and 18 per cent jump in its mineral product revenues for 2022.
The blue-chip FTSE 100 index, down 8 per cent over the past 21 days, eked out a modest 0.4 per cent gain, in line with most of its European peers. The mid-cap FTSE 250, meanwhile, fell slightly, weighed down by real estate and consumer-facing stocks.
By and large, however, investors shrugged off the UK’s latest inflation print which showed the rate of consumer price unexpectedly rise from 10.1 per cent in January to 10.4 per cent, starkly contrasting with most forecasts.
Retail tech company Ocado was the biggest gainer on the day, adding around 2 per cent. Consumer goods giant Unilever added close to 1.8 per cent.
It was a mixed bag for UK banks, meanwhile, with HSBC up by almost 2 per cent while its peers Lloyds and Barclays shed 0.8 per cent and 0.3 per cent.
European investors held to a holding pattern on Wednesday, with the pan-European Stoxx 600 and the blue-chip Stoxx 50 indices both nudging ahead by around 0.4 per cent following stronger sessions earlier in the week.
In line with global trends, European banks and financials generally were weaker on the session. BNP Paribas, Intesa Sanpaolo and ING gave back between 0.2 per cent and 0.4 per cent. French insurer Axa had shed around 0.8 per cent by closing bell, while its German peer Allianz was flat on the session.
Energy stocks also declined on falling commodities prices with Spanish utility Iberdrola down 0.8 per cent and shares in French company TotalEnergies off by 0.2 per cent.
Otherwise European markets were a sea of green after well received comments by European Central Bank officials on the fight against inflation, with marginal gains across a range of sectors. Among the biggest winners were luxury brands including LVMH, Hermes and L’Oreal, which added between 1 per cent and 2.2 per cent.
After markets closed in Dublin, the US central bank announced that it would press ahead with a further 0.25 per cent hike in rates, but hinted that it was on the verge of pausing future hikes in view of recent turmoil in the financial sector. Wall Street indexes gained on the announcement, with all three main stock indexes jumping.
As expected by the overwhelming majority of traders, the US central bank delivered another 25 basis-point hike. While officials indicated the tightening cycle is not over yet, they decided to leave their year-end inflation forecast unchanged at 5.1 per cent.
Among the big name movers were chipmakers Advanced Micro Devices and Nvidia, both up around 3.4 per cent, while Apple, Intel and Microsoft were up by between 0.8 per cent and 1.5 per cent. – Additional reporting: Reuters, Bloomberg