Shares flirt with 13-month high in listless trade

Global stocks hit a 13-month high on Wednesday and the US dollar drifted lower as attention turned towards next week’s pivotal inflation data and Federal Reserve meeting, where chances of a rate hike continued to ebb.

On Wall Street, stocks ceded earlier gains, with the tech-heavy Nasdaq Composite dropping 0.74 per cent as investors took profits in mega-cap stocks such as Nvidia Corp following recent surges. The S&P 500 Index slipped 0.24 per cent, and the Dow Jones Industrial Average was little changed.

The pan-European benchmark Stoxx 600 index dipped 0.19 per cent, compared with a 0.51 per cent jump in the MSCI’s broadest index of Asia-Pacific shares outside Japan. That left the MSCI’s broadest index of world stocks down 0.16 per cent, after edging up earlier to a 13-month high.

Dublin

AIB and Bank of Ireland both gained, by 0.2 per cent and 1.2 per cent respectively, in an otherwise quiet day’s trading. Retail banks have profited from low-paying current accounts. In contrast, Permanent TSB fell almost 2 per cent to €2.09. Ryanair shares rose despite the airline having to cancel hundreds of flights to popular holiday destinations in France and Spain due to French air traffic control strikes. Home builder Cairn Homes rose by 2.4 per cent to €1.10. Other movers included Paddy Power Betfair owner Flutter, which fell 0.6 per cent to €180.30

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Europe

European shares dipped slightly as strong updates from Zara owner Inditex and Danske Bank failed to stir a risk-on mood among investors bracing for key central bank meetings next week.

The Stoxx 600 Index closed down 0.2 per cent, with insurers and healthcare stocks underperforming, while retailers climbed the most in more than two months. Inditex advanced after it reported an estimate-beating 43 per cent jump in operating profit. Danske Bank shares gained after the lender raised its key target for profitability.

Data from China showed exports shrank much more quickly than expected in May and imports fell, albeit at a slower pace, as manufacturers struggled to find demand abroad and domestic consumption remained sluggish.

“The Chinese trade data is the latest indicator that tells you there’s nothing good going on in global demand,” eToro’s Ben Laidler said. “There’s a huge gulf in the global economy between services and manufacturing. This is a warning sign that global growth will slow from here. The question is how much.”

London

The FTSE 100 was little changed, ending at 7,624.34.

There was also fairly little change on international markets. As traders were preparing to shut up for the day in London the S&P 500 in New York was down just 0.1 per cent, while the Dow Jones was trading flat.

The price of Brent crude oil rose 1.4 per cent to $77.37 dollars per barrel, helping to increase the value of Shell and BP shares.

Diageo dropped 0.4 per cent on Wednesday after it said outgoing chief executive Sir Ivan Menezes had died after a short illness.

New York

S&P 500 and Nasdaq gave up early gains to drop on Wednesday as technology stocks reversed course, while investors awaited inflation data and the Federal Reserve’s policy meeting next week.

Major technology and growth stocks fell between 0.1 per cent and 3.1 per cent, barring Netflix and Tesla, which rose 1.1 per cent and 1.8 per cent, respectively. More than half of the S&P subsectors declined, led by communication services that lost 1.4 per cent. Inflation data in the US is expected to show consumer prices cooled slightly on a month-over-month basis in May but core prices are likely to have remained elevated.

The fall on Wednesday is reflective of a lack of confidence in investors over the sustainability of the rally, as it is dependent on a small concentration of major names, said Peter Andersen, founder of Andersen Capital Management.

Some analysts say big tech and other major growth stocks could soon see some profit-taking. Meanwhile, the CBOE Volatility Index hit the lowest since February 14th, 2020. Wells Fargo raised the price target on Netflix shares to $500 from $400 per share, the highest on Wall Street, according to Refinitiv. – Additional reporting: Reuters