European equities tumbled to the lowest level since March 2021 as investors worried that surging inflation will fuel more aggressive monetary tightening, increasing risks of recession. In the US Wall Street’s main stock indexes also fell sharply, and the S&P 500 was on track to confirm a bear market on similar fears that the US Federal Reserve’s aggressive interest rate hikes would tip the economy there into reverse.
Dublin
The Iseq index was down 2.6 per cent, in line with falloffs on other European exchanges.
Travel and consumer-related stocks fared especially poorly, as fears of a broad recession kicked in. Ryanair fell 4.2 per cent to €12.30 per share as unions called a strike for June in Spain, one of its most important summer markets.
In other travel stocks Irish Continental Group, the owner of Irish Ferries, declined by 6.2 per cent to close at €3.53, while hotel group Dalata fell 5.7 per cent to €3.99 per share.
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US-exposed Irish companies also declined on fears of recession across the Atlantic. Building materials group CRH was down 3.6 per cent to €34, while Kingspan was down 2.2 per cent to €72.48.
London
The FTSE 100′s poor run continued into a fresh week as a slump in UK GDP, rampant inflation and worries over virus curbs in China press further on sentiment. As a result commodities and retail stocks were broadly in the red at the end of the session. London’s top flight ended the day down 1.53 per cent, at 7,205.81, to strike its lowest closing price since March.
Bus and train operation Go-Ahead Group leapt in value after it told shareholders it received two takeover approaches which it would “be minded to” accept if a firm bid is made. Shares in the company closed 150p higher at 1,360p. Other transport firms, such as National Express, also made gains as a result of takeover interest in the sector.
Elsewhere, housebuilder Countryside finished lower despite putting itself up for sale weeks after rejecting a takeover bid. Countryside Partnerships told shareholders on Monday it has hired advisers from Rothschild & Co to oversee the potential sale process after its decision to rebuff a £1.5 billion approach by a US investor resulted in shareholders’ calls for a sale. Shares moved 5.6p lower to 280.2p.
Europe
European shares fell to their lowest in more than three months on Monday, and the euro STOXX volatility index – an equivalent in Europe of the US VIX index, also known as Wall Street’s fear gauge – surged to a one-month high. Benchmarks in many countries including the Netherlands have suffered declines of more than 20 per cent from a recent closing peak.
Among other regions Italy’s FTSE MIB underperformed, falling 2.8 per cent to the lowest since February 2021. Banks and STMicroelectronics led the declines.
In France, the CAC 40 was down 2.7% today, while the German Dax decreased by 2.47% by the end of the session.
German property company TAG Immobilien slumped to the lowest since March 2017 after a double-downgrade at Barclays Plc to underweight from overweight.
New York
All the major S&P sectors were sharply lower, with energy and consumer discretionary leading the declines, as worries over inflation, rate hikes and the Ukraine war unnerved investors. Speculative areas of the market inflated by years of Fed and government largesse buckled. Profitless software firms, newly public companies and blank-check entities were sold off.
The CBOE Volatility index, also known as Wall Street’s fear gauge, spiked to 33.47 points, its highest level since May 12th.
Market heavyweights Apple, Alphabet, Microsoft Corp and Amazon.com fell between 2.4 per cent and 5.9 per cent.
Cryptocurrency, and blockchain-related stocks, including Riot Blockchain, Marathon Digital Holdings and Coinbase Global, fell between 11.6 per cent and 14.2 per cent as bitcoin slumped more than 10 per cent.
(Additional reporting: Bloomberg/PA/Reuters)
