European markets retreat in the face of Omicron variant

Transport shares outperform, especially in bullish early New York trade

Bank of Ireland, which attracted the heavier trading, and AIB (above) both finished in the black

Bank of Ireland, which attracted the heavier trading, and AIB (above) both finished in the black

 

The Omicron variant continued to dominate market sentiment on Thursday, with markets across Europe stepping back while, in the US, early trading pointed to a recovery from Wednesday’s falls.

DUBLIN

Iseq’s all-share index dipped in tandem with the general mood in Europe, closing 0.23 per cent weaker on 7,935.25. Financials actually gained on a day when smaller cap stocks struggled for confidence.

Among the most active stocks, Ryanair managed to eke out some gains despite virus-focused jitters in the sector, finishing just over 1 per cent stronger on €15.065.

Kerry also gained, adding 1.44 per cent to €109.45. But elsewhere among the big hitters, the mood was less upbeat. CRH dipped 0.16 per cent to €43.43 while Smurfit Kappa was 0.22 per cent easier on €45.58. Flutter Entertainment fared worse, seeing 2.76 per cent wiped off during the session to close on €119.60.

Bank of Ireland, which attracted the heavier trading, and AIB both finished in the black, adding 0.38 and 0.68 per cent respectively to end the session at €4.956 and €1.993.

LONDON

UK shares fell as fears around the Omicron variant grew, with several countries reporting cases, while warnings about inflation from major central banks added to the downbeat mood.

The benchmark Ftse 100 index ended 0.6 per cent lower, although that was the best performance among Europe’s top blue-chip indices. The domestically focused mid-cap index fell 0.9 per cent.

Royal Mail fell 4.6 per cent and was among the worst performers on the blue-chip Ftse 100 as it traded ex-dividend.

Johnson Matthey and Darktrace dropped 2.2 per cent and 8.7 per cent respectively after index manager Ftse Russell confirmed the companies were set to leave the Ftse 100.

Halfords Group rose 6.5 per cent after saying it would buy Axle Group for £62 million as the cycle retailer shifts focus to its motoring services business.

Also capping losses were oil majors BP and Royal Dutch Shell, both rising about 1.5 per cent as crude futures rise.

EUROPE

European shares fell more than 1 per cent as countries ramped up restrictions to curb the spread of the Omicron variant, raising worries about hits to a nascent economic recovery.

The continent-wide Stoxx 600 closed down 1.2 per cent, giving back more than half of the previous day’s gains when a recovery in the pandemic-exposed sectors triggered the Stoxx 600’s best session in almost six months.

Travel and leisure shares, which suffer the most from movement curbs, fell 2.6 per cent, bringing losses this year to 7 per cent, significantly underperforming other major sectors that are on course to gain in double digits.

Tech stocks were the biggest decliners in Europe, with semiconductor companies Infineon Technologies, AMS and ASML down 4.4-5.7 per cent on a report that Apple warned of slowing demand for its iPhone 13.

Luxury goods firms Hermès and Richemont fell 3.1 per cent and 2.1 per cent, respectively, despite their inclusion in the blue-chip Euro Stoxx 50 index.

Vifor Pharma surged 21 per cent to the top of Swiss mid-cap index after media reports that Australian biotech firm CSL was in talks to buy the drug maker.

NEW YORK

Wall Street’s main equity gauge moved higher, recovering from falls in the previous session, as the Omicron variant continued to drive market volatility.

All three US indices were green, with a bias towards value over growth, and economically sensitive smallcaps and transports outperforming the broader market.

The Dow Jones Industrial Average rose 688.29 points, or 2.02 per cent, to 34,710.33, the S&P 500 gained 73.8 points, or 1.64 per cent, to 4,586.84 and the Nasdaq Composite added 126.91 points, or 0.83 per cent, to 15,380.96.

A day earlier, the benchmark S&P index had gained in early dealings before closing 1.2 per cent lower, marking its largest intraday swing since March.

The blue-chip Dow was on track for its best one-day percentage gain since November 9th last year, with Boeing providing the biggest lift.

All 11 major sectors of the S&P 500 were green, with financials enjoying the biggest percentage gain, with healthcare stocks up the least.

Boeing Co advanced 6 per cent after China’s aviation authority gave its seal of approval the plane maker’s 737 Max aircraft.

Kroger Co surged 12.5 per cent to top the S&P 500 after the grocery retailer raised its full-year sales and profit forecasts. Consumer credit companies Visa, Mastercard and American Express all gained more than 4 per cent.