Global stocks wobble on US price data

Paring earlier gains, global equities lost ground late on Thursday as investors parsed the implications of new US price and unemployment data.

Underscoring persistent inflationary pressures that could force the Federal Reserve to pursue further rate hikes, US producer prices rebounded unexpectedly in January, boosted by higher energy prices.

Dublin

The Iseq index, up by about 0.3 per cent, traded in line with its European peers, recovering towards the end of the session after a US data-induced “wobble”, traders in Dublin said.

Following the data release, Federal Reserve Bank of Cleveland president Loretta Mester said in prepared remarks that she had seen a “compelling economic case” for the Fed to roll out another 50 basis-point hike earlier this month.

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Her comments reverberated across global financial markets, including Dublin, where larger cap companies such as Smurfit Kappa felt the pinch. Shares in the cardboard box-maker fell 1.3 per cent to close the session at €36.16. Kingspan – which publishes full-year results on Friday – and CRH also gave back 0.8 per cent and 1.2 per cent respectively, closing out the session at €59.96 and €44.32.

Meanwhile, Kerry Group shares – up 3.5 per cent to €91.06 – surged to their highest level in three months on Thursday, after the food and ingredients giant reported a surge in operating profit and increased its dividend, even as it dealt with rising prices and “market uncertainty” for the year ahead.

Bank of Ireland, Permanent TSB and AIB all gained 0.3-1.3 per cent while house builder Glenveagh jumped 0.3 per cent to 98 cent per share.

London

The blue-chip FTSE 100 eked out a modest 0.2 per cent gain on Thursday while the mid-cap FTSE 250 index slipped by just under 0.1 per cent in trading.

Cigarette-maker Imperial Brands continued its slide, falling more than 3.6 per cent, in what traders said was a negative read-across from other tobacco companies. With cigarette sales volumes declining across a number of key markets, according to reports, British American Tobacco also slid 0.7 per cent on Thursday.

The standout winner on the day was Bord Gáis owner Centrica, shares in which climbed 5.6 per cent on results showing that its profits tripled to a record £3.3 billion last year against the backdrop of soaring energy prices and production.

Europe

The pan-European Stoxx 600 and blue-chip Stoxx 50 indices added almost 0.3 per cent and 0.5 per cent on Thursday, briefly hitting their highest levels in a year. Lifted by luxury stocks, the French Cac 40 headed toward a record close for the first time in a year.

Due to China’s reopening and a robust earnings season, shares in luxury names such as Louis Vuitton, Hermes International and Ray-Bans-maker EssilorLuxottica climbed 0.1-1.8 per cent on Thursday.

Buoyed by the prospect of higher rates, French, Italian and Spanish banks also gained, with BNP Paribas up 2.3 per cent, Intesa Sanpaolo up 2.2 per cent and Santander up 2.1 per cent.

Jameson-maker Pernod Ricard, meanwhile, jumped 3.6 per cent after strong half-year results.

New York

Stocks lost ground in the US while the dollar rose with treasury yields on Thursday after economic data showed higher-than-expected US producer prices for January while jobless claims fell, feeding worries that the Federal Reserve would keep aggressively tightening policy to fight inflation.

Investors have been upping their bets on how far the Fed will raise rates this tightening cycle.

The main stock indices reflected renewed anxieties, with the Dow Jones Industrial Average down 0.7 per cent, while the S&P 500 also lost nearly 0.7 per cent and the Nasdaq Composite made a similar downward move.

Shares of high-growth stocks such as Tesla, Nvidia, Alphabet and Apple fell 0.8-2.7 per cent as US treasury yields rose.

Cisco Systems rose 5.1 per cent to hit a nine-month high after the network gear maker raised its full-year earnings forecast. Streaming hardware group Roku soared 14.9 per cent after the company forecast first-quarter revenue above Wall Street estimates.

Shopify, meanwhile, sank 15.8 per cent after the Canadian ecommerce company forecast slowing revenue growth for the current quarter despite price hikes and new product launches. – Additional reporting: Bloomberg, Reuters