Mixed bag for global markets as Israel-Iran tensions ease

Global shares were a mixed bag on Wednesday as tensions between Israel and Iran eased, allowing markets to focus on US inflation and prospects of an interest-rate cut.

Dublin

Red was the “order of the day” for stocks as Euronext Dublin, according to traders, as the index finished down 0.8 per cent and largely in line with international peers.

The banks outperformed the index, with AIB and Bank of Ireland up 0.5 per cent and 0.3 per cent respectively. PTSB climbed 3 per cent, albeit on low volume. “They have had a rough run the past few day, so they are recovering some of that,” noted a trader.

Ryanair fell 1 per cent but outperformed peers with EasyJet and Lufthansa each down 2.5 per cent.

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In terms of the home builders, Glenveagh Properties and Cairn Homes finished down 3 per cent and 2 per cent respectively. “It feels like there is definitely a bit of weakness in the Irish housebuilders at the moment,” said a trader.

Elsewhere, Cavan-based insulation specialist Kingspan finished down 2.3 per cent. Most of the food names were down 1-2 per cent.

London

The FTSE 100 closed 0.5 lower, well below early highs, despite a stellar showing from Babcock International after well-received results. The FTSE 250 ended 0.1 per cent lower.

Babcock International leapt 11 per cent after it raised medium-term guidance, increased the dividend and launched its first-ever share buyback as it said it stands to benefit from increased spending on defence.

Defence and aerospace stocks Rolls-Royce and BAE Systems rose 0.8 per cent and 1 per cent respectively as Nato agreed to ramp up defence spending.

On the FTSE 250, Moonpig fell 4.1 per cent ahead of full-year results on Thursday, while Tritax Big Box Reit fell 2.9 per cent after striking a cash and shares deal to acquire Warehouse Reit, which rose 5.6 per cent.

THG leapt 13 per cent after disclosing a “much improved” second quarter in its core beauty and nutrition arms, as it returned to revenue growth.

Europe

Euro zone government bond yields rose as investors processed concerns about increased fiscal spending across the euro area and kept a wary eye on the Iran-Israel ceasefire.

Germany’s cabinet approved a draft budget with record investments on Tuesday, while Nato leaders endorsed a higher defence spending goal of 5 per cent of GDP by 2035.

German 10-year government bond yields, which serve as the benchmark for the wider euro zone, rose 3 basis points to 2.56 per cent. Yields on 30-year German bonds hit a near one month high of 3.087 per cent.

In European equities, the Cac 40 in Paris closed down 0.8 per cent, and the Dax 40 in Frankfurt ended 0.6 per cent lower. The Stoxx Europe 600 fell 0.5 per cent.

New York

The benchmark S&P 500 hovered close to an all-time high as the Israel-Iran ceasefire appeared to be holding and investors watched Federal Reserve Chair Jerome Powell’s congressional testimony for hints on the monetary policy path.

The S&P 500 index remains about 0.6 per cent below its peak, hit in February, while the tech-heavy Nasdaq is about 0.8 per cent below a record high as the de-escalation in Middle East hostilities supported risk sentiment.

The Nasdaq 100 – a subset of the Nasdaq composite index – touched an intraday record high.

Nine of the 11 major S&P 500 subsectors fell. Real estate and utility stocks led declines with a 0.7 per cent decline each. On the flip side, the information technology sector gained 1.1 per cent.

Shares of delivery giant FedEx fell 2.9 per cent after the company forecast quarterly profit below estimates as tariffs weighed on global demand.

Among megacap stocks, Tesla shares fell 4.3 per cent as its European sales slumped for the fifth month. Nvidia rose 2.6 per cent. – Additional reporting: Agencies