European stocks fall as investors turn cautious
CRH leads Dublin market higher, while sterling rises against dollar and euro
Skyscrapers in the Canary Wharf financial district of London: The FTSE 100 was dragged down by falls for mining stocks on Thursday. Photograph: Chris Ratcliffe/Bloomberg
European stocks closed lower on Thursday as a renewed rise in US bond yields and expectations of a jump in inflation hit investors’ appetite for risk, with mining and tech stocks leading losses.
Meanwhile, sterling rose against both the dollar and the euro after currency traders weighed up the impact of UK chancellor of the exchequer Rishi Sunak’s Wednesday budget.
The Iseq finished 0.75 per cent higher, rising at the close of the session, with its performance on the day lifted by a 2.7 per cent gain for cement-maker CRH, its largest stock, after it published its 2020 results. The building materials group ended at €39.20 after it highlighted an improvement in margins and said it was well-positioned to capitalise on growth opportunities despite the uncertain near-term outlook.
Elsewhere, Ryanair gave up some of its previous day’s gains, slipping 1.6 per cent to €16.68, while packaging giant Smurfit Kappa fell 1.5 per cent to €40.24. Glanbia declined 1 per cent to €11.40.
Financial stocks were in the red, with AIB dropping 4.9 per cent to just below €1.97 ahead of its earnings announcement on Friday, while Bank of Ireland ended 2.9 per cent lower at €3.44.
Paddy Power owner Flutter Entertainment added 2.6 per cent to €175.60 and insulation company Kingspan rose 2.25 per cent to €65.80.
The FTSE 100 index of blue-chip shares fell 0.4 per cent, while the mid-cap FTSE 250 slid 0.65 per cent.
Mining heavyweights Rio Tinto and BHP Group shed 7.7 per cent and 5.8 per cent respectively as they traded ex-dividend and were affected by a fall in copper prices.
Mid-cap stock Aggreko rose 8 per cent after it was reported that the portable power generator had been approached by another company, Platinum Equity, regarding a potential takeover. Aggreko is in talks with a rival buyout consortium.
Guinness manufacturer and spirits giant Diageo added 2 per cent after the US agreed to suspend millions of pounds’ worth of tariffs on UK exports, including cutting the 25 per cent rate on Scotch whisky to zero for four months.
The pan-European Stoxx 600 index fell 0.4 per cent, with miners dropping the most among the European sectors. In Germany, the Dax dropped 0.2 per cent, while the French Cac 40 finished flat. Spanish and Italian stocks rose slightly.
Technology stocks, the driver of the market’s rebound from pandemic-driven lows, fell 3.3 per cent as a global semiconductor shortage weighed on the sector, while a rise in bond yields also spurred more scrutiny of high stock valuations.
Dutch firm ASML Holding dropped 6.1 per cent despite news that it had extended a deal to sell chip manufacturing equipment to China’s largest chipmaker SMIC.
Unibail-Rodamco-Westfield – Europe’s biggest retail property owner – topped the Stoxx 600 after French tycoon Xavier Niel raised his stake in the firm.
German broadcaster Prosiebensat.1 Media fell 7.3 per cent after forecasting that revenue and profits would grow in single digits this year, after a strong showing in the fourth quarter.
German airline Lufthansa slipped 3 per cent as it posted record losses for 2020 and trimmed its 2021 capacity plans as Covid-19 disruption drags on.
The S&P 500 and the Nasdaq slipped in choppy early trading as jittery investors looked to remarks from Federal Reserve chairman Jerome Powell on rising bond yields, while data pointed to a staggering recovery in the jobs market.
The Fed chairman refrained from pushing back more forcefully against the recent spike in Treasury yields and said the central bank was still “a long way” from achieving its goals.
The energy sector enjoyed a 1 per cent jump on the back of higher oil prices. Apple, Tesla and PayPal were among the top drags on the S&P 500. – Additional reporting: Reuters/Bloomberg