Shares subdued as investors weigh uncertain outlook

European shares paused for breath on Monday after last week’s rally with markets again assessing the uncertain outlook for growth and inflation.

The main Wall Street indices, meanwhile, were little changed, holding on to the gains that followed the Federal Reserve’s decision to pause interest rate hikes last week.

DUBLIN

Down 0.8 per cent on the session, the Iseq index underperformed its European peers, weighed down by sectoral moves in the construction and building materials sectors.

After publishing what traders in Dublin described as “essentially blowout” numbers for the six-month period to the end of September 30th, Ryanair was the standout performer on the day, climbing 5.3 per cent to €16.01 per share. Profits at the airline rose 59 per cent to €2.18 billion, ahead of previous expectations.

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Kingspan, meanwhile, moved to the bottom of the index, falling 5.2 per cent in Dublin to close at €65.70, its biggest drop in April. In a trading update on Monday, the insulation giant reported a drop in sales over the first nine months of the year even as it expected to report a record profit for 2023. However, traders said the stock had risen by as much as 10 per cent as investors awaited the results so the decline was not necessarily a reflection of Monday’s numbers.

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Other names in house building and construction materials declined in line with a sectoral move across Europe and in the UK. Cairn Homes fell 3.2 per cent to €1.14 per share while Glenveagh was off by 1.7 per cent at 96 cent per share at close.

AIB also fell by 3 per cent to close at €8.34 per share amid reports that the Government could look to offload a further 5 per cent stake in the lender as early as this week.

EUROPE

European equities were subdued after last week’s rally with the blue-chip Stoxx 50 index down by close to 0.4 per cent and the pan-European Stoxx 600 essentially flat on the session.

Real estate stocks lost 1.1 per cent, after emerging as the top sector performer last week.

Telecom Italia jumped as much as 5 per cent, before turning negative, after the phone company’s board approved the sale of its fixed-line network to US private equity firm KKR, sparking dissent from its leading shareholder Vivendi.

Italy’s biggest bank Intesa Sanpaolo advanced 1.4 per cent after lifting its 2023 profit goal and pledged to increase rewards for shareholders, barring a deep recession.

Evotec dropped 6.1 per cent to the bottom of the Stoxx 600 after RBC downgraded the German biotech firm’s stock to “sector perform” from “outperform”.

PostNL lost 11 per cent after the Dutch postal company posted third-quarter results below expectations.

LONDON

UK stocks inched lower on Monday, led by a drop in shares of real estate investment trusts, while investors awaited key economic data to assess the strength of the British economy. The benchmark FTSE 100 finished the day flat while the mid-cap FTSE 250 declined by 1.4 per cent.

Aerospace and defence stocks rose 0.7 per cent boosted by a 4 per cent gain in shares of Melrose Industries after the aerospace supplier said GKN Aerospace Engines business expanded its partnership with GE Aerospace.

EasyJet and Wizz Air gained 3.7 per cent and 3 per cent, respectively, after Ryanair forecasted a record annual profit and promised a regular dividend pay.

Sportswear retailer JD Sports climbed 1.2 per cent after Citigroup initiated coverage on the stock with a “buy” rating.

All eyes will be on the UK gross domestic product data this week, which is expected to show a contraction of 0.1 per cent on a monthly basis in September, compared with growth of 0.2 per cent a month ago, according to a Reuters poll of economists.

NEW YORK

US equities held on to last week’s gains with traders betting the Federal Reserve will start cutting rates next year. After notching its best week of 2023, the S&P 500 edged 0.1 per cent higher on Monday with the Nasdaq Composite and the Dow Jones Industrial Average eking out similar gains.

Dish Network dropped 6.6 per cent after the pay-TV provider missed third-quarter revenue estimates. Chief executive Erik Carlson also announced he would step down from the role.

Bluegreen Vacations surged 105.1 per cent after vacation property operator Hilton Grand proposed to buy the peer in a $1.5 billion (€1.4 billion) deal.

Berkshire Hathaway fell by close to 2 per cent despite reporting that its cash pile scaled a fresh record at $157.2 billion. — Additional reporting: Reuters/Bloomberg