Shares slide as traders brace for central bank rate decisions

European shares slipped on Monday as hotter-than-expected inflation data from Spain added to market jitters as investors brace for a slew of interest rate hikes from prominent central banks later in the week.

Market watchers across Europe and the US will this week have their eyes on a series of interest rate decisions, with the European Central Bank, US Fed and the Bank of England all meeting to decide on rates.

Dublin

The Iseq overall index of shares ended the session down 0.69 per cent, dragged lower by banking shares and weakness in some of the major shares. AIB lost more than 2 per cent to close the day at €3.82, while Bank of Ireland was 0.1 per cent off and Permanent TSB was down just under 1 per cent.

Ryanair stock declined 2.42 per cent to close at €15.14, after the company said shareholders will have to wait until at least next year before the airline restarts returning cash to them. Chief executive Michael O’Leary said the group would pay off its debt, with €1.6 billion in bonds falling due in the coming months, and cover €2.5 billion in spending. Mr O’Leary also appeared to rule out large share buy-backs in the future, with modest, steady dividend payments instead.

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Kingspan shares lost 2.54 per cent, and Smurfit Kappa was down just under 1 per cent.

CRH rose 0.45 per cent to €42.54, while Glanbia rose 1 per cent to close the day at €11.31.

London

The top shares in London managed to start the week with a small gain as traders continue to eye the near record highs that the FTSE 100 reached earlier this month. Led by retailers and consumer goods companies, the top index pushed 19.72 points higher, or 0.3 per cent, ending the day at 7,784.87.

One of the big shocks in London on Monday was 888. The betting company saw its shares plummet by 28 per cent. In a double hit the business said that its chief executive has quit and that it has launched an internal investigation into some of its practices. Details were sparse, but the business said it may not have followed anti-money laundering and know client best practices in the Middle East when dealing with some VIP customers. It suspended VIP accounts in the region with immediate effect.

The move itself only impacts 3 per cent of the company’s revenue, but the potential problems spooked markets.

Investors were less concerned by a breach at JD Sports which could have given hackers access to the personal details, though not debit card numbers, of 10 million customers. Shares closed down 0.5 per cent.

Shareholders in Shell shrugged at a shake-up at the company’s top. Ahead of the oil major’s financial results due this week, new boss Wael Sawan announced a series of changes, including the combination of its oil and gas and liquid natural gas divisions.

Europe

The pan-European STOXX 600 closed down 0.2 per cent. The technology index was the top decliner among STOXX 600 sectors, down 1.7 per cent, with chip stocks ASM International and Nordic Semiconductor among those posting the biggest losses.

Limiting declines on the STOXX 600, UK-based consumer goods giant Unilever rose 1.3 per cent after announcing a new chief executive.

Boosting the broader healthcare sector, Philips jumped 7 per cent after the Dutch health technology company said it will scrap another 6,000 jobs.

Germany’s DAX index was down 0.2 per cent.

Among other stocks PNE dropped 16.1 per cent after the German renewables firm said Morgan Stanley is no longer pursuing a stake sale.

New York

US stocks dropped as investors cautiously stepped into a week that includes the Federal Reserve’s interest-rate decision and earnings from big-tech companies including Apple and Alphabet.

The S&P 500 fell, dragged down by the technology and communication-services sectors. The tech-heavy Nasdaq 100 declined nearly 2 per cent. Treasury yields rose, with the benchmark 10-year rate around 3.55 per cent.

While the Fed is expected to raise rates by a quarter percentage point on Wednesday, slowing its pace for a second straight session, traders will be watching for the tone it sets for future meetings. Fed Chair Jerome Powell has continued to push back against traders anticipating rate cuts later this year, emphasising that he won’t budge until inflation has eased meaningfully. – Additional reporting: PA, Reuters, Bloomberg

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