Global stocks dip as hopes for lower interest rates this year fade

Global stocks fell on Tuesday, along with prices for US and other government debt, as market optimism that the Federal Reserve will cut interest rates sharply this year faded.

Dublin

Euronext Dublin finished the day down 25 basis points, which was largely in line with European peers on what was a slow start to the year for markets.

It was however a strong start for the financial names as Bank of Ireland climbed 3.4 per cent, while Permanent TSB and AIB were up 3.4 per cent and 1.5 per cent respectively.

Among the airlines, Ryanair climbed 25 basis points. “It is a big month for bookings,” noted a trader. “We won’t get any feedback on how it’s going for them until probably later in the month, but it’s definitely on the radar for people at the moment.”

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It was a slow day for the food names, as sandwich-maker Greencore finished the day down 1.5 per cent, while dairy giant Kerry Group sank 1.6 per cent.

It was a better day for housebuilders as Glenveagh Properties climbed 0.5 per cent while Cairn Homes was up 15 basis points. Insulation specialist was down 1.25 per cent at close of business.

Elsewhere, box-maker Smurfit Kappa was one of the weaker movers on the day, finishing down 1.8 per cent.

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Smurfit Kappa and US-based WestRock agreed to merge in recent months in a deal that will create the world’s biggest packaging group with $34 billion of annual revenues. It is essentially a takeover by Smurfit Kappa that will see the group headquartered in Dublin.

“There is still the deal situation there in the background and there is volatility around that and whether it goes through and what will happen over the next few months,” said a trader. “It stood out as a weaker player today.”

London

The FTSE 100 dipped 0.15 per cent as news of Britain’s worsening factory downturn signalled the economy has more hurdles to overcome this year.

Shares in Marks & Spencer and Tesco rose after rival supermarkets Aldi and Lidl revealed record Christmas trading.

Aldi said it had its “best-ever” performance with UK sales of more than £1.5 billon (€1.7 billion) for the first time in the month leading up to Christmas, and Lidl recorded its busiest trading day on Friday, December 22nd.

The positive news from the discounters comes ahead of major supermarkets due to report their sales performances next week. Shares in M&S closed 1.3 per cent higher and Tesco was up 0.9 per cent.

Europe

Euro zone government bond yields rose on the first trading day of 2024, moving away from multi-month lows as money markets discounted around 160 basis points of policy rate cuts this year.

Among the markets, the pan-regional Stoxx 600 index lost 0.25 per cent while MSCI’s gauge of stocks across the globe shed 0.87 per cent.

It was a slow start to trading for stock markets elsewhere in Europe. At the end of the day, Frankfurt’s Dax was up 0.11 per cent and Paris’s Cac 40 was down 0.26 per cent.

New York

US stocks fell on the first trading session of 2024 after Apple shares dropped on a broker downgrade and Treasury yields climbed as investors tempered expectations around interest-rate cuts this year.

Apple fell 2.7 per cent after Barclays downgraded the tech giant to “underweight”, citing weakening iPhone demand. Other megacap stocks including Nvidia and Microsoft shed 2.8 per cent and 1.5 per cent, respectively.

Tesla inched up 0.8 per cent as it delivered a record number of electric vehicles in the fourth quarter, beating market estimates and meeting its 2023 target of 1.8 million vehicles.

Boeing shed 2.6 per cent after Goldman Sachs removed the aerospace company from its “conviction list”. — Additional reporting: Agencies

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