European markets came under pressure on Monday as the air war in the Middle East revived concerns about an energy supply shock exacerbating inflation.
Dublin
Shares plunged on the Irish stock market, leaving the Euronext Dublin in the red. The main index fell almost 2 per cent on the opening session of the week, led by declines in banking shares and heavyweight food and construction stocks.
AIB and Bank of Ireland saw shares fall by 1.9 per cent and 2.8 per cent respectively, while Permanent TSB also declined. Insurer FBD was 3.5 per cent lower by the closing bell.
Food groups Kerry and Glanbia also saw shares dip, with Kerry down 2.5 per cent and Glanbia shedding 1.6 per cent.
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The construction sector also took a hit from the market uncertainty. Insulation specialist Kingspan lost 1.6 per cent over the day, while home builders Glenveagh and Cairn also shed some value. Shares in airline Ryanair dipped 1.6 per cent to close the day at €26.99.
London
UK stock indexes were swept up in the global sell-off on Monday, as the escalating military conflict in the Middle East fuelled a jump in oil prices and drove investors towards safe-haven assets.
While British oil majors such as Shell rose 1.9 per cent and defence companies like BAE Systems climbed 6 per cent, other equity sectors, particularly banks and travel companies, came under heavy selling pressure as investors braced for travel and economic disruptions.
The blue-chip FTSE 100 closed down 1.2 per cent, having touched a record high in the prior session, while the domestically oriented FTSE 250 index fell 1.4 per cent.
Banks including HSBC, Barclays and Lloyds Banking Group fell between 2.5 per cent and 4.2 per cent, as surging oil prices fuelled concerns about a resurgence of inflation and a potential dent to the economy.
British government bond yields rose as investors trimmed their expectations for Bank of England interest rate cuts.
British Airways operator IAG fell 5.5 per cent after the airline said on Saturday it had cancelled flights to Tel Aviv and Bahrain until March 3rd. The broader FTSE 350 travel & leisure index fell 4.3 per cent, with hotels and cruise operators among the big decliners.
Europe
European markets tumbled on Monday, with the Stoxx 600 falling 1.6 per cent by the close of the day. The CAC 40 in Paris closed down 2.2 per cent, while the DAX 40 in Frankfurt ended 2.6 per cent lower.
ING says the euro zone is the most exposed large economy to the conflict, a setback for a region that had benefited from investors’ diversification from the United States.
European banks were hit hard on Monday, extending Friday’s losses on concerns about private credit.
New York
The reaction in New York was more muted following heavy falls on Friday.
The Dow Jones Industrial Average was down 0.4 per cent, while the Nasdaq Composite was slightly higher.
The S&P 500 was little changed after a slide that earlier topped 1 per cent as energy and defence firms gained while the software group rallied. Airlines sank.
Wall Street’s worries about an inflation resurgence sent bonds slumping as oil surged amid an escalating war in the Middle East, with traders trimming bets on rate cuts. The dollar rose and stocks bounced from session lows.
Also weighing on Treasuries were figures showing manufacturing expanded, with input prices soaring. Ten-year yields headed towards their biggest advance since April.
– Additional reporting: Reuters/PA/Bloomberg
