Stocks slump as investors take heed of Russia-Ukraine tensions

Travel and banking shares among the fallers as European markets decline

European shares fell on Thursday as heightened Russia-Ukraine tensions eclipsed a slew of encouraging earnings from companies such as Kering, Reckitt Benckiser and Commerzbank.

Banking and energy shares led declines as oil prices dropped and benchmark European bond yields slipped for the second consecutive session, with investors seeking shelter in the safety of bonds.

There was also a fall in yields on the German 10-year government bond, the go-to safe-haven asset in the euro zone.

Dublin

The Iseq dropped 0.75 per cent, as Ryanair was dragged down by the European-wide negative sentiment toward travel stocks. The airline, which announced a string of new routes from Cork Airport, sank 3.5 per cent to €16.86 as investors took a downbeat view of the potential recovery in the sector.

Building materials group CRH fell 1.1 per cent to €43.70, while Dalata Hotel Group was another faller, declining 2.2 per cent to €3.86.

The banks joined in the slippage for financial stocks, with Bank of Ireland closing 2.4 per cent lower at €6.29 and AIB finishing 1.6 per cent lower at €2.60.

Food groups Kerry and Glanbia avoided the red, with Kerry adding 1 per cent to €110.00 and Glanbia edging up 0.3 per cent to €12.62. Insulation-maker Kingspan also made a lacklustre move upwards, rising 0.6 per ent to €91.40.

London

The FTSE 100 declined 0.9 per cent, extending losses from Wednesday’s session, following reports of Ukrainian forces and pro-Moscow rebels trading fire, while weakness in financials and energy stocks further dented sentiment.

Oil majors BP and Shell fell 1.4 per cent and 2.7 per cent respectively, tracking crude prices as talks to resurrect a nuclear deal with Iran entered their final stages, but losses were limited by the Ukraine crisis.

Banking stocks slipped 1.3 per cent, tracking weakness in British two-year government bond yields which fell sharply for a second straight day, while the FTSE 250 fell 1.2 per cent.

Standard Chartered reversed early losses to end 1.7 per cent higher after the lender raised its core profitability goals and promised shareholders extra payouts, despite full year profit undershooting expectations, as it banks on inflation-battling rate hikes worldwide to boost lending.

Reckitt Benckiser jumped 5.9 per cent and was the biggest gainer on the blue-chip index after beating estimates for fourth-quarter sales, as heightened fears about Covid-19 led to increased demand for its cleaning products.

Europe

The pan-European Stoxx 600 index fell 0.7 per cent. Travel stocks were the top losing European sub-index, down 1.7 per cent, over fears that the potential conflict in Ukraine could derail the recovery of the sector, especially of airline stocks.

In Germany, the Dax fell almost 0.7 per cent, while France's Cac 40 slipped 0.3 per cent, the least among its European peers, with French stocks boosted by a 5 per cent jump in luxury goods maker Kering after it reported sharp growth in quarterly sales on the back of its top Gucci brand. Hermes added 1.1 per cent.

Commerzbank added 3.2 per cent after the German lender swung to a better-than-expected fourth quarter and painted a rosy outlook for 2022.

Airbus slipped 1.3 per cent after it predicted higher profit and deliveries for 2022 but cautioned that supply chain tensions and a spike in inflation remained challenges for now.

US

Wall Street stocks slumped more than 1 per cent, with investors scurrying to the safety of bonds and gold as tensions between Washington and Moscow heated up.

Chipmaker Nvidia slid 6.4 per cent as flat gross margins and concern about its exposure to the crypto market overshadowed upbeat current-quarter revenue forecast.

TripAdvisor slipped 2.6 per cent after the hotel search website operator posted a surprise fourth-quarter loss, while DoorDash surged 6.8 per cent after it reported upbeat quarterly revenue as food delivery demand showed no sign of slowing, indicating ordering habits have changed permanently. – Additional reporting Reuters