European shares declined yesterday, led by technology stocks, and the Dow dropped 3.6 per cent in the US, as concerns about inflation and central bank rate hikes dampened optimism that had taken hold of the market in the previous session around China’s economic recovery.
While global stocks had rallied on Tuesday amid declining cases of Covid-19 in China, the world’s main manufacturing hub, the market bears were back in control yesterday.
The pan-European Stoxx 600 index fell 1.1 per cent, after rising a little more than 3 per cent since Friday.
The Iseq overall index ended the session down 1 per cent at 7,084.35, with industrial heavyweights CRH and Smurfit Kappa falling 1.4 per cent and 3.6 per cent, respectively.
Kingspan, which fell 2.2 per cent to €75.36, drew no comfort from the release of positive earnings from fellow insulation group Rockwool, which said demand for its products remained solid.
Insurer FBD dropped 3.3 per cent to €9.16, as sector followers fretted about the impact of volatility on the investment portfolios of insurance groups.
Still, banking stocks were in demand, with AIB adding 0.6 per cent to €2.27 and Bank of Ireland gaining 1.6 per cent to €5.63, amid a fresh focus on central bank rate increases and as industry consolidation chatter swept the wider European sector.
The FTSE 100 index closed 1.1 per cent lower snapping a three-day winning streak. UK inflation leapt in April to its highest annual rate since 1982. Soaring energy bills were the biggest driver.
Still, Premier Foods, the maker of Mr Kipling cakes and Oxo cubes, added 10.1 per cent as it said it would raise prices of its products as part of plans to tackle rising input costs.
Pub operators Marston's and Mitchells & Butlers slid 7.2 per cent and 1.4 per cent, respectively, after they warned that the cost of living crisis and expenses stemming from the Ukraine conflict would crimp their businesses.
European travel company Tui's UK-listed shares fell 12.9 per cent after it announced a share sale to pay back elements of a German state bailout that it had received during the peak of the pandemic.
Germany's Commerzbank rose 3.1 per cent, while Italy's UniCredit gained 2 per cent after a report spoke of scheduled merger talks before the potential deal was abandoned because of the Ukraine war.
Euronext rose 3.9 per cent on record quarterly revenue. Dutch bank ABN Amro topped profit estimates but shares fell 11.9 per cent as it warned about the impact of the war in Ukraine.
Siemens Gamesa jumped 12.6 per cent, after sources said Siemens Energy is preparing to buy the remaining stake in the wind turbine maker. The stake is worth €3.14 billion.
The Dow sank more than 1,100 points and the S&P 500 had its biggest drop in nearly two years, as big earnings misses by Target and other major retailers stoked investors' fears that surging inflation could cut deeply into corporate profits.
The broad sell-off erased gains from a solid rally a day earlier, the latest volatile day-to-day swing for stocks in recent weeks amid a deepening market slump.
The S&P 500 slumped 4 per cent, its sharpest decline since June 2020. The benchmark index is now down more than 18 per cent from the record high it reached at the beginning of the year. That is shy of the 20 per cent decline that is considered a bear market.
The Dow dropped 3.6 per cent, while the Nasdaq fell 4.7 per cent. The three indexes are on pace to extend a string of at least six weekly losses.
The S&P 500 fell 165.17 points to 3,923.68, while the Dow slid 1,164.52 points to 31,490.07. The Nasdaq slid 566.37 points to 11,418.15 . – Additional reporting: Reuters