European shares decline and bond yields rise as US inflation hits 40-year high

European shares ended slightly lower on Thursday as rising bond yields and weak results from France's Atos dampened the tech sector, although positive Linde and Siemens earnings, along with improving trends for travel stocks, helped limit broader losses.

Data showing US consumer price inflation is at 7.5 per cent, its highest rate since 1982, created space for a more hawkish Federal Reserve and pushed up sovereign yields across the globe.

DUBLIN

The Iseq gained 1.1 per cent, outperforming the major European indices as Ryanair rode the wave of positive sentiment towards travel stocks and finished 3 per cent higher at €18.26.

Smurfit Kappa was another climber, with the packaging group adding 3.1 per cent to close at €49.21, while the market was also supported by 1.7 per cent rise for food group Kerry, which finished at €108.45.

Stocktake: Bear market checklist is not flashing red

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Irish bond prices fall amid international sell-off

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Sterling close to 23-month high versus euro

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Markets pegged back by rising oil prices and inflation worries

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Bank of Ireland rose 0.4 per cent to €6.92 on a day when it emerged that the Government's stake in the bank has fallen below 6 per cent. AIB added 2.4 per cent to €2.74.

Building materials group CRH closed fractionally positive at €45.32, while Hibernia Reit added 1.3 per cent to €1.25 after it released a trading statement highlighting a recovery in the office property market.

LONDON

The FTSE 100 closed 0.4 per cent higher, boosted by AstraZeneca’s gains following an upbeat sales forecast, while strong metal prices lifted mining stocks to their highest in more than a decade.

AstraZeneca jumped 3.4 per cent after the drugmaker raised its annual dividend for the first time in a decade and forecast higher sales for 2022, with new drugs against cancer, kidney disease and rare conditions making up for a decline in Covid-19 products.

Unilever, however, slipped 1.3 per cent after the consumer products maker warned its profit may suffer this year as it struggles to offset soaring costs with higher prices.

Expectations of higher interest rates have lifted heavyweight banking stocks and rising oil prices have bolstered the commodity-heavy index.

The FTSE 250 mid-cap index added 0.1 per cent, meanwhile, buoyed by travel and leisure stocks.

EUROPE

The pan-European Stoxx 600 index closed 0.2 per cent lower, with the heavyweight technology sector among the top drags. In Frankfurt, the Dax was marginally positive, but in Paris the Cac 40 slipped 0.4 per cent.

French IT consultancy firm Atos slid 4.5 per cent after it took total writedowns of €2.4 billion in the second half of 2021.

Chemical stocks rose after positive earnings from US-German firm Linde. Shares of the world's largest industrial gas firm jumped 3 per cent after it said it was targeting double-digit growth in adjusted earnings per share in 2022.

Shares of Siemens jumped 4.7 per cent, marking its best one-day percentage gain in nearly 13 months, after the engineering and technology group said it was seeing "extraordinary" order intake from its customers.

However, Credit Suisse tumbled 6.6 per cent after warning of weak 2022 earnings, while Pernod Ricard fell 0.7 per cent. The French spirits group forecast strong sales growth in its 2022 fiscal year, but flagged a slightly softer start to the Chinese lunar holiday.

US

Mega-cap stocks dragged US stock indexes lower amid fears the Federal Reserve will act aggressively to counter inflation.

Amazon. com, Apple, Google-owner Alphabet and Microsoft fell between 0.4 per cent and 1.8 per cent in early trading.

Big banks like Wells Fargo, Bank of America and JPMorgan Chase that tend to do well in a higher interest rate environment,gained more than 1 per cent each.

Disney jumped 4.3 per cent after beating revenue and profit estimates on strong subscriber additions and attendance at US theme parks.

Barbie-maker Mattel and cereal-maker Kellogg gained 8.6 per cent and 3.6 per cent respectively after forecasting full-year profit above market expectations.

– Additional reporting: Reuters