European shares closed sharply lower on Thursday as concerns over the impact of mounting sanctions against Russia weighed on sentiment, even as a relentless rally in commodity prices boosted mining stocks.
Volatile crude prices sent heavyweight oil stocks sharply lower as investors feared the impact of the Ukraine crisis.
Banks also slid, extending falls earlier this week due to concerns about their exposure to Russia, as well as receding expectations of interest rate hikes from the European Central Bank.
The Iseq fell 2.5 per cent, as Ryanair was unable to hold onto its gain in the previous session amid pressure on airlines, and Glanbia sank after publishing annual results and announcing a €50 million share buyback programme.
The food group signalled that it would cease its “relatively small” branded sales with Russia as part of what Goodbody analysts called a “mixed update”. In Dublin, it share price declined 10.8 per cent to €11.04.
Ryanair closed 3.5 per cent lower at €18.88, while Irish bank stocks were also in the red, joining in the pattern seen across Europe.
AIB fell 2.1 per cent to €2.19 on a day when it reported a net profit of €645 million for 2021 and said it was in talks to buy back some of the State's shares as part of a plan to hand over €213 million to shareholders.
Bank of Ireland declined 0.9 per cent to €5.65, while Dalata Hotel Group dropped 5.3 per cent to just under €3.73 on a day when most Irish stocks slumped.
The FTSE 100 fell 2.6 per cent, as oil majors Shell and BP declined 5.7 per cent and 4.3 per cent respectively, tracking a drop in crude prices on a potential Iran nuclear deal that could boost supplies.
Russia-exposed miner Polymetal plunged 42.1 per cent after losing its spot on the index.
Further losses in the benchmark index were capped by a gain of 9.6 per cent in exchange operator London Stock Exchange Group after it posted positive earnings.
The FTSE 250 mid-cap index slumped 3.4 per cent. Broadcaster ITV dropped 27.5 per cent as its digital expansion plans left investors unimpressed. Cybersecurity company Darktrace jumped 11.2 per cent after it raised its full-year outlook for the second time in three months.
The Europe-wide Stoxx 600 index slipped 2 per cent, having given up modest gains soon after the open. Travel and retail stocks led a broad-based decline.
Germany’s Dax hit over one-year lows, closing almost 2.2 per cent lower, while France’s Cac 40 finished 1.8 per cent lower and Spain’s Ibex sank 3.7 per cent, dragged down by utility stocks.
French bank Societe Generale slumped 0.8 per cent to hover near a near one-year low, after it warned of the possibility that Russia could strip the bank of its local operations. The lender has a $20 billion exposure to Russia, one of the largest among foreign lenders.
Lufthansa fell 8.2 per cent after the airline said it could not provide a detailed outlook for 2022 due to the war in Ukraine and the pandemic.
Meanwhile, a survey conducted before the conflict showed business activity across the euro zone accelerated sharply last month as demand soared.
Megacap growth stocks dragged the Nasdaq and S&P 500 lower as investors worried that soaring commodity prices due to the Ukraine crisis will add to inflationary pressures. Kroger jumped 10 per cent after the grocer forecast upbeat annual same-store sales and profit, encouraged by strong demand for its pick-up and delivery services and sustained home-cooking trends. Best Buy Co rose 9.9 per cent after the consumer electronics retailer said it expects annual sales to surpass peak pandemic levels in 2024.
American Eagle Outfitters slid 13.5 per cent after the clothing retailer forecast a decline in earnings for the first half of 2022.
– Additional reporting: Reuters