European stocks tumbled on Thursday following signals that the European Central Bank (ECB) would likely increase interest rates this year, while weak results from Facebook-owner Meta added to pressure on global technology stocks.
Markets trended further lower after ECB president Christine Lagarde chose not to repeat her previous comment that a 2022 rate hike was unlikely, while pressure also arrived after the opening of markets on Wall Street, where Meta plunged 26 per cent in early trading – a historic loss of more than €200 billion from its market value.
The Iseq closed down 2.1 per cent in a difficult trading session, with declines for most of its biggest stocks. Ryanair fell 1.75 per cent to €16.32, building materials group CRH dropped 1.2 per cent to €45.68, and packaging group Smurfit Kappa declined 1.8 per cent to €47.50.
Paddy Power-owner Flutter Entertainment sank 6.6 per cent to €125.85 on modest trading volume, though the stock was also one of the biggest decliners in London, where it dropped 5.3 per cent.
Kerry Group, which was down 1.5 per cent to €110.00, and insulation-maker Kingspan, which was 2.7 per cent lower at €83.92, also joined in the malaise.
But it was a better day for the banks, reflecting the trend across Europe, with Bank of Ireland climbing 1.3 per cent to €6.25.
The FTSE 100 erased early gains to end 0.7 per cent lower as the pound jumped after the Bank of England announced a second consecutive interest rate hike to curb inflation. The FTSE mid-cap index fell 1.3 per cent.
Strong quarterly earnings from companies in the energy and consumer sector helped limit some losses. Shares in Compass group rose 4 per cent after the catering giant said its first-quarter revenue had reached 97 per cent of pre-pandemic levels.
Energy giant Shell was up 1.4 per cent after it boosted its dividend and share repurchases, and its fourth-quarter profit soared to $6.4 billion.
Gambling software-maker Playtech's shares jumped 8.3 per cent after TTB Partners sought its release from takeover rules that prevent the shareholder from making a fresh offer for the British company after a deal with Aristocrat collapsed.
The pan-European Stoxx 600 closed down 1.8 per cent with tech stocks the worst performers, losing 3.5 per cent in the fallout from Facebook’s Wednesday night earnings update.
The sector was also pressured by a spike in bond yields after investors suffered jitters over a possible tightening of monetary policy by the ECB.
In Frankfurt the Dax slid 1.6 per cent, while the Cac 40 in Paris declined 1.5 per cent.
European banks were the best performers, while telecom stocks were supported by Deutsche Telekom, which rose 2.6 per cent on strong results from its US unit T-Mobile.
Swiss drugmaker Roche fell 2.4 per cent after saying sales growth would slow this year as it braces for less demand for its Covid-19 medicines and diagnostics.
Publicis Groupe, the world's third biggest advertising agency, added 0.5 per cent after forecasting organic sales growth of 4 per cent to 5 per cent this year, and as its 2021 earnings exceeded pre-pandemic levels to reach new records.
Wall Street shares fell, with the Nasdaq diving more than 2 per cent as Meta’s dour forecast jolted the broader tech sector.
Meta shares plummeted more than 26 per cent, in what could be the worst single-day wipeout in market value for a US company, as it blamed Apple's privacy changes and increased competition from rivals such as TikTok for its disappointing outlook.
The tech-heavy Nasdaq fell 2.2 per cent as shares of other social media companies also took a beating. Twitter and Pinterest fell more than 5 per cent, while Snapchat owner Snap lost 20.6 per cent.
Amazon. com, scheduled to report results after the close of markets, declined 6.8 per cent.
– Additional reporting: Reuters