European shares slide as investors fear more rate hikes

European markets took a backwards step on Friday after a positive march in recent sessions. Markets fell as the impact of rising interest rates on the economy unsettled investors amid a growing chorus of central bank officials insisting monetary policy would need to remain tight for some time.

Dublin

The Iseq Overall Index ended the week in the red as banking shares and building stocks slid, following a Europe-wide trend.

Banking stocks slid, with Bank of Ireland down almost 2 per cent by the close to €9.66, and AIB shedding 1.4 per cent to €3.92. Permanent TSB fell nearly half a per cent to €2.13.

Shares in Ryanair fell 6 per cent to €14.63, reversing the week’s earlier gains made after the airline announced its summer schedule for a number of UK and Irish routes.

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CRH fell 1.3 per cent, while Smurfit Kappa lost 4.2 per cent. Flutter Entertainment was also lower, shedding almost 3.5 per cent over the session to close at €139.15.

Kingspan, which releases preliminary results next week, was one of the brighter spots of the day, up 2.9 per cent to end the week at €59. But the company has seen turbulence this week, falling 8 per cent on Wednesday after Danish insulation maker Rockwool’s forecast of a 10 per cent sales decline for the year, and a further 1.5 per cent on Thursday.

London

The FTSE 100 moved 0.4 per cent lower on Friday to finish at 7,882.45. Early morning figures from the Office for National Statistics confirmed the UK economy stagnated in the final three months of 2022.

The data confirmed that the UK narrowly avoided a recession, but investor sentiment was weak amid a 0.5 per cent contraction in December.

Standard Chartered shares lost ground after First Abu Dhabi Bank (FAB) confirmed that a takeover offer for the FTSE firm was not on the cards. The rebuttal came after reports on Thursday that the United Arab Emirates bank could be again considering a takeover bid worth up to $35 billion (€32.8 billion) for London-listed Standard Chartered.

Shares in the business slipped 38.2p to 729.4p by the close of play.

Saga moved higher in value after the group confirmed reports it is in talks regarding the potential sale of its insurance underwriting arm. Shares in Saga closed 6.4p higher at 177.3p on Friday as a result.

Elsewhere, shares in Itim Group sank 9.85p to 40p after the software solutions business said earnings for last year were due to be a disappointing £200,000.

Europe

European shares fell, with the Stoxx Europe 600 down 1 per cent, logging its first weekly decline in three weeks.

Travel and leisure stocks and retailers were the worst performers among STOXX 600 sector indexes, down 3.9 per cent and 3.5 per cent respectively.

Energy bucked the trend and advanced 2.3 per cent, boosted by BP and Shell, which tracked a rise in oil prices on Russia’s plans to reduce oil output.

Adidas dropped 10.9 per cent, logging its steepest drop in nearly three years after the sportswear maker warned it could plunge to a loss this year for the first time in three decades. The company’s peer Puma also fell 4.6 per cent.

Zara owner Inditex fell 4.6 per cent after the world’s biggest fast-fashion retailer agreed an inflation-busting 20 per cent increase in average wages for shop workers in its home market of Spain.

Germany’s Dax fell by 1.44 per cent, and the French Cac 40 declined by 0.88 per cent at close.

New York

The Nasdaq index fell on Friday as growth stocks came under pressure after Treasury yields extended gains, while shares of ride-hailing firm Lyft plunged following a downbeat profit forecast.

Apple, Amazon, Microsoft and Tesla were down 0.6-4.4 per cent.

At 10.09am ET, the Dow Jones Industrial Average was little changed while the S&P 500 was down 0.24 per cent. The Nasdaq Composite was down 0.8 per cent.

Lyft plummeted 35.3 per cent as current-quarter profit forecast was well below estimates and it also lowered prices, raising concerns it was falling behind bigger rival Uber, whose shares dropped 3.6 per cent.

Shares of chip behemoth Intel dipped 0.7 per cent after sources said it is weighing a $1.5 billion expansion of its chip testing and packaging plant in Vietnam. – Additional reporting: Reuters/PA/Bloomberg

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