Business

Shares tread water ahead of ECB meeting and US inflation data

Iseq index down 0.8% on Tuesday, dragged lower as recent rally in Irish bank shares goes into reverse

All eyes are on Frankfurt ahead of Thursday's crucial European Central Bank governing council meeting. Photograph: Michael Probst/AP

Ian Curran
Tue Apr 9 2024 - 17:46

Global shares trended lower on Tuesday as investors keenly awaited key US inflation data on Wednesday and the European Central Bank’s latest interest rates decision on Thursday in Frankfurt.

Meanwhile, spot gold hit a record high for the eighth session in a row, supported by central bank buying and heightened geopolitical tensions, according to analysts.

Dublin

Subdued trading volumes on the Euronext Dublin saw the Iseq All-Shares index down by close to 0.8 per cent on Tuesday as a recent rally in Irish bank shares went into reverse.

Shares in Permanent TSB fell by more than 3.7 per cent to €1.55 per share on low volumes. AIB slipped by 1.4 per cent to €4.96 per share, while Bank of Ireland shed 1.2 per cent to close at €9.84 per share. However, traders in Dublin said investor interest in Irish lenders remains strong and the declines were mostly due to cautious trading in advance of Thursday’s ECB meeting.

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Some of the biggest names on the Dublin index also slipped, with Ryanair shedding 1.4 per cent to €21.31 after a strong start to the week. Insulation giant Kingspan declined by 1.5 per cent to €83.30 per share.

Meanwhile Kerry Group’s 1.2 per cent rise to €78.95 per share helped put a floor under the index, traders said.

Europe

With all eyes on Frankfurt in advance of Thursday, the pan-European Stoxx 600 index shed 0.6 per cent while the blue-chip Stoxx 50 index declined by 0.7 per cent.

On Tuesday a defence shares index compiled by Goldman slid as much as 7.5 per cent, the most since November 2022, impacted also by the possibility of a Gaza ceasefire. Some of the top European names in the industry tumbled, with Swedish Saab and German Rheinmetall shedding 6.9 per cent and 9.8 per cent respectively.

Airbus, meanwhile, slipped 3.4 per cent to the bottom of the blue-chip index, while big names in luxury like Hermes, Ray-Bans-maker EssilorLuxottica and Luis Vuitton-owner LVMH all sliding on the session.

London

UK shares were a mixed bag on Tuesday with the FTSE 100 down marginally by 0.1 per cent at closing bell, while the mid-cap FTSE 250 fell by close to 0.4 per cent.

Bank shares slipped as traders awaited Wednesday’s key US inflation data. Shares in NatWest, Barclays and Lloyds fell by between 0.8 per cent and 2.2 per cent, while big defence names like Rolls-Royce Group and BAE Systems also slipped.

The ongoing rally in gold prices pushed previous metal and industrial miners higher, with Fresnillo, up 3.9 per cent, the top performer on the session. Endeavour Mining added more than 2.8 per cent, with Antofagasta up 2.4 per cent. Anglo American and Rio Tinto advanced 1.6 per cent and 1.8 per cent respectively.

BP shares added 1.8 per cent as the energy giant expects first-quarter upstream production of both oil and gas as well as low-carbon energy to be higher than the previous three months.

JTC, meanwhile, gained as much as 5.3 per cent after the financial services firm reported a 28.7 per cent increase in full-year revenue.

New York

Both the S&P 500 and the Dow Jones Industrial Average were marginally in the red by closing bell in Dublin, with only the Nasdaq Composite managing to tread water.

Losses on the S&P were led by chipmaker Nvidia, which slipped more than 3 per cent at one stage, while other mega-cap tech names were also negative for the day with Meta and Netflix down more than 1 per cent each.

Treasuries climbed, with 10-year yields dropping from the highest levels in 2024 in what was expected to be a fairly quiet session in advance of Wednesday’s consumer price index.

Markets have been tempering bets on Fed cuts for days as US economic data remains resilient and officials have pushed back against the need for easing.

“The inflation prints for March and April will play an outsized role in determining whether the Fed proceeds to cut rates in June,” said Krishna Guha at Evercore. “We think the hurdle is not crazy severe and the odds are the data will come in good enough to go ahead.”

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times

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