European shares recovered some lost ground on Tuesday following their worst sell-off since June 2020 on fears about aggressive monetary policy tightening moves by the US Federal Reserve and the potential for military conflict in Ukraine.
Major UK-listed stocks rebounded from a one-month low, supported by major bank stocks as expectations of tighter monetary policy drove up bond yields.
US stock indices fell as a sell-off in technology firms ahead of the Federal Reserve’s policy meeting on Wednesday overshadowed upbeat corporate results.
The Iseq in Dublin finished the session marginally ahead, as the major bank stocks outperformed while some property stocks fell away.
AIB was ahead by 2.9 per cent to close at €2.26, while Bank of Ireland was up by 1.4 per cent to €5.60 by the end of the session. Banks across Europe were up on expectations that monetary policy will tighten to combat inflation.
Hotel group Dalata was 2 per cent firmer on €3.98, as anticipation grew that the hospitality sector is in for a far stronger 2022.
After a Sherry Fitzgerald property report that predicted housebuilding would soon be back at Celtic Tiger levels, Cairn Homes was up by almost 1.8 per cent to €1.26, but rival Glenveagh was down by 0.5 per cent to €1.17 and Ires Reit dropped 1.2 per cent to €1.66.
The blue-chip FTSE 100 index gained 1 per cent, with lenders HSBC and Lloyds Banking Group among the top boosts. Heavyweight oil stocks also rose as concerns of a military conflict in Ukraine and risks in the Middle East buoyed crude prices with the prospect of supply disruptions.
Royal Mail rose 1.3 per cent after it said it would lay off about 700 managers as part of cost-cutting efforts aimed at transforming the centuries-old postal company.
Unilever slipped 0.2 per cent after the consumer products maker unveiled plans to cut about 1,500 management jobs. The Marmite-to-Dove soap-maker is planning to axe about 15 per cent of senior management roles and 5 per cent of more junior management roles after Bloomberg reported cuts were afoot. Shares dipped by 7.5p to 3,936p as the move failed to allay investor concerns.
Recruiter Staffline jumped in value after its underlying profits more than doubled to £10 million (€11.9 million) for the past year after hiring demand surged following lockdowns. Shares in the company were 4.5p higher at 60p at the end of the session.
The German Dax increased by 0.75 per cent and the French Cac rose by 0.74 per cent. Rate-sensitive banking stocks were the top gainers, up 2.9 per cent across Europe, while stabilising commodity prices helped lift sectors including basic materials and energy.
In earnings-driven moves, Swiss computer peripherals-maker Logitech International gained 6.2 per cent after raising its earnings forecast for the current fiscal year.
Sweden's Ericsson jumped 7.6 per cent as it reported fourth-quarter core earnings above market estimates, helped by higher sales of telecoms gear with more countries rolling out 5G networks.
Credit Suisse slipped 0.9 per cent to hit a 20-month low after the scandal-hit lender warned it was likely to report a net loss in the fourth quarter as it flagged fresh legal costs and said business in its trading and wealth management divisions had slowed.
Dow components American Express and IBM gained 7.4 per cent and 3.5 per cent, respectively, after posting strong fourth-quarter results.
Johnson & Johnson also rose, by 2.2 per cent, after the drugmaker forecast as much as $3.5 billion (€3.1 billion) in sales of its Covid-19 vaccine in 2022.
But General Electric tumbled 6.6 per cent after the industrial conglomerate reported a decline in quarterly revenue amid persistent global supply chain disruptions.
3M also rose after it said demand for its N95 respirators had picked up due to a surge in Omicron-related Covid-19 cases, while reporting better-than-expected quarterly profit as more people purchased its air filters and Scotch-branded products. – Additional reporting: Reuters/PA