Global markets muted as oil drops on hopes of Ukraine resolution

Global markets were muted on Tuesday, but the three main Wall Street stock indexes rose a day before an expected interest rate hike by the US Federal Reserve, while oil prices dropped 5 per cent on hopes of an end to the conflict in Ukraine.

Dublin

Euronext Dublin recovered from early lows on Tuesday to finish flat.

Budget airline Ryanair ended the day up 18 basis points after giving up gains it made in the early afternoon. A trader said the company had been aided this week by more stability in oil markets compared with last week.

Among the main movers on the day were building materials company CRH, which finished the day up 1 per cent, and property group Hibernia Reit, which finished up 0.5 per cent.

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The banks were the major movers on the downside, with AIB and Bank of Ireland down 4.7 per cent and 2.5 per cent respectively. Permanent TSB was down 2 per cent.

“Volumes were low, with Bank of Ireland down 42 per cent versus what it would normally trade, while AIB’s was down 25 per cent,” said a trader.

Elsewhere, insulation specialist Kingspan was down 2.4 per cent, while packaging company Smurfit Kappa was down 2.6 per cent.

London

The FTSE 100 slipped, dragged down by banking and mining stocks, while strong jobs data supported the case for a Bank of England interest rate hike later this week.

The blue-chip FTSE 100 fell 0.3 per cent, while the mid-cap index dropped 1 per cent. Industrial miners dropped 2.4 per cent as metal prices fell on concerns about the impact of surging Covid-19 cases in top metals consumer China.

Money markets are fully pricing in a 25 basis points interest rate hike by the Bank of England on Thursday, its third hike in a row as it seeks to tame the surge in inflation that has been intensified by Russia’s invasion of Ukraine.

However, banks, which usually benefit from higher rates, fell 1.8 per cent and weighed on the benchmark index.

Among individual stocks, events group Informa rose 3.4 per cent after reporting higher annual profit, as more trade shows and conferences resumed from the pandemic hiatus and its digital business expanded.

TP ICAP, the world's biggest inter-dealer broker, fell 15.3 per cent after reporting an 81 per cent profit slump last year.

Europe

European stocks fell, with commodity-linked sectors leading the losses, as concerns about surging coronavirus cases in China added to nerves ahead of the widely expected US interest rate hike.

The pan-European Stoxx 600 index fell 0.3 per cent, after rising in the last two sessions when hopes of progress in Russia-Ukraine peace talks had lifted sentiment.

French luxury goods makers LVMH, which draws a major part of its revenue from China, dropped 1.5 per cent, making it the biggest drag on the Stoxx 600.

Dutch tech investor Prosus, which has a stake in China's Tencent, fell 6.6 per cent, hitting a record low, amid continued weakness in Chinese tech shares.

Among other stocks, Sweden's H&M, the world's second-biggest fashion retailer, slipped 3.2 per cent after reporting a rise in quarterly sales that was in line with expectations.

Tobacco and nicotine products maker Swedish Match slumped 4.2 per cent after it said it had decided to pause plans to spin off and list its US cigar business.

New York

Wall Street’s main indexes climbed as oil prices extended declines and data showed a softer-than-expected rise in producer prices, with investors remaining focused on the outcome of the Federal Reserve’s two-day policy meeting.

Ten of the 11 major S&P sectors advanced, with technology and consumer discretionary stocks climbing over 2 per cent each. Energy – the standout performer among sectors this year – slid. Chevron tumbled 5.1 per cent.

Megacap growth stocks gained, with Microsoft and Amazon.com up 2.2 per cent and 3 per cent respectively, providing the biggest boost to the S&P 500 and the Nasdaq.

Big banks, which tend to benefit from rising interest rates, rose. JPMorgan Chase & Co advanced 1.4 per cent. – (Additional reporting: agencies)