The US-Israeli war on Iran sent global markets tumbling on Thursday with concern intensifying that central banks will be forced to tighten policy to keep inflation in check.
DUBLIN
Euronext Dublin was a sea of red as the index was dragged down 2.3 per cent, largely in line with international peers.
Cavan-based insulation specialist Kingspan sank 4.6 per cent. “That was a sectoral move in the building products space,” said a trader. “All those groups were down 4-7 per cent. The geopolitics is not helping there with the price of oil and steel.”
Irish housebuilders Cairn Homes and Glenveagh Properties finished the day down 2.8 per cent and 1.9 per cent respectively.
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After the close of the market, Cairn Homes chief executive Michael Stanley said he is proposing to sell up to 3.5 million shares in the company, representing approximately 0.6 per cent of its issued share capital. He currently holds approximately 2.4 per cent.
The airlines were also hit as Ryanair dropped 3 per cent, although it outperformed many of its peers with the likes of Air France down 6 per cent and EasyJet down 4.7 per cent. “A lot of that will again have been based on the price of oil,” the trader said.
The Irish banks all gave up a lot of the gains they made on Wednesday as AIB and Bank of Ireland finished down 1.2 per cent and 1.6 per cent respectively.
LONDON
The blue-chip FTSE 100 finished at its lowest in about two months, down 2.4 per cent, after the Bank of England’s unanimous decision to leave rates unchanged, while the intensifying Middle East conflict also suppressed risk appetite.
The mid-cap FTSE 250 was also down 2.4 per cent, its lowest level since November last year.
The central bank kept borrowing costs on hold as expected, warning of inflation risks from the war in the Middle East. Some of the policymakers also raised the prospect of raising rates.
The energy sector was the only one to trade in a positive territory, rising 1.6 per cent as oil prices jumped after Iran attacked energy facilities across the Middle East following Israel’s strike on its South Pars gasfield, a major escalation in the war. BP gained 4.9 per cent.
Of the 100 stocks on the FTSE 100, 97 finished in the red. Metal miners and banks were down 7.8 per cent and 4.3 per cent respectively, making them the day’s worst performers.
HSBC dropped 3.1 per cent after reports the bank is considering job cuts of up to 20,000 roles.
EUROPE
Stocks were lower across Europe also, with the Stoxx 600, a broad European index, down about 2.5 per cent. The Cac 40 in Paris closed down 2 per cent, while the Dax 40 in Frankfurt ended down 2.8 per cent.
Short-dated euro zone government bond yields jumped as traders priced in more rate hikes from Europe’s central banks and energy prices surged due to the Iran war, even as the European Central Bank and Bank of England held borrowing costs steady.
Germany’s two-year yield, which is sensitive to ECB rate expectations, rose by as much as 18 basis points on Thursday as bonds fell. It then dipped but was last up 12 basis points to 2.567 per cent after reports the ECB may need to begin discussing interest rate hikes in April.
NEW YORK
Wall Street’s main indexes fell as rising crude oil prices revived inflation fears and the Federal Reserve’s cautious stance on interest rate cuts weighed on sentiment.
The rate-sensitive Russell 2000 index dropped 0.7 per cent, having briefly touched a 10 per cent loss from its all-time intraday high earlier in the session.
A strong forecast from Micron Technology did little to uplift sentiment, with shares dropping 4.1 per cent, as investors mulled the chip company’s higher spending plans given elevated borrowing costs.
Other memory chip stocks that have rallied this year were also knocked down. SanDisk and Applied Digital fell more than 2 per cent each, while AI leader Nvidia dipped 1.2 per cent. (Additional reporting: Agencies)
