European shares fall after Fed signals early policy tightening

European shares ended a touch lower on Thursday as hawkish signals from the US Federal Reserve raised concerns over early policy tightening. Mining shares bore the brunt as commodity prices tumbled.

DUBLIN

Ryanair was the main market mover in Dublin, rising 3 per cent to €16.80 after the UK said it was considering allowing people who are double vaccinated against Covid-19 to enjoy a foreign holiday without intrusive red tape. Hotel chain Dalata followed the positive trend for travel stocks, rising 0.8 per cent to €4.40.

Pharmaceutical firm Open Orphan rose 2.3 per cent after it announced plans to spin out a Dublin-headquartered company focused on infectious diseases, called Poolbeg Pharma.

Food group Glanbia fell 3 per cent to €13.85 as heritage agency An Taisce continues to seek leave to appeal a decision to grant Glanbia planning for a major cheese factory in Co Kilkenny. Packaging giant Smurfit Kappa fell 1.6 per cent amid a general weakness in cyclical stocks linked to the US sentiment on rates. Bank of Ireland rose marginally to €5.01 while AIB fell 1.6 per cent €2.43.

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Global stocks slip after Fed signals tighter monetary policy

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LONDON

Miners knocked London’s FTSE 100 index off 16-month highs on Thursday on a bad day for commodity prices, although Britain’s plans to ease travel restrictions allowed airline shares to buck the trend.

The blue-chip index ended 0.4 per cent down, snapping its five-day winning streak and marked its biggest percentage fall in two weeks.

Base and precious metal miners slid 3 per cent and 3.5 per cent respectively, as commodity prices slipped after the Fed signalled it could raise rates earlier than expected. "The US Federal Reserve has proved a bit of an unreliable partner to the markets, promising not to raise rates too far or too fast and then suddenly announcing an acceleration in its plans on this front," said Danni Hewson, analyst at AJ Bell in a note.

The domestically focused mid-cap FTSE 250 index declined 0.4 per cent. Dr Martens slipped 11.5 per cent to the bottom of the index even after the classic British boot brand reported a 22 per cent rise in its annual core earnings. Oil majors BP and Royal Dutch Shell fell 1.5 per cent and 0.7 per cent respectively, tracking weaker crude.

EUROPE

European shares have rallied to record highs on dovish signals from the European Central Bank, with optimism over an economic recovery this year also supporting sentiment.

In company news, German biotech Curevac tumbled 44.3 per cent, marking its worst day on record after its Covid-19 vaccine missed the main goal in a late-stage trial.

European travel stocks rose 0.1 per cent as Britain said it was considering allowing those who are double vaccinated against Covid-19 to enjoy a foreign holiday without intrusive red tape. British train ticket seller Trainline surged 5.1 per cent to the top of the Stoxx 600, after it posted a staggering 269 per cent jump in first-quarter British ticket sales.

NEW YORK

US technology shares jumped on Thursday on optimism around a speedy economic recovery, although the Federal Reserve’s unexpectedly hawkish message on monetary policy kept the S&P 500 subdued. Five of the 11 S&P indexes were down in late morning trade, while information technology rose the most among gainers.

Chipmaker Nvidia Corp jumped 5.5 per cent, leading the charge among technology behemoths after Jefferies raised its price target on the stock.

Shares of Apple, Microsoft, Amazon and Facebook reversed premarket declines to rise between 0.3 per cent and 1.4 per cent as investors bet that a steady economic rebound would boost demand for their products in the long run. – Additional reporting by Reuters