Risk-taking subdued due to concerns Federal Reserve may delay cuts to interest rates

European shares dipped on Friday as risk sentiment remained subdued due to mounting concerns the Federal Reserve may delay interest rate cuts, though strength in telecommunications stocks helped stem losses.

Dublin

A modest rise in bank shares and paper packaging group Smurfit helped boost the Dublin market on the final session of the week.

Shares in Bank of Ireland gained 1.8 per cent on Thursday’s closing price to end the day at €8.91, while AIB added 1.27 per cent. FBD decline 1.7 per cent, closing at €12.80.

Smurfit Kappa shares climbed 2.5 per cent, finishing the week at €41.80. However, Kingspan shares were off the pace, losing almost 1 per cent over the session.

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Food groups Kerry and Glanbia both saw gains on Friday, with the latter ending up 2.3 per cent and Kerry up 0.66 per cent.

London

A 13 per cent slide in Reckitt Benckiser shares dragged the UK’s blue-chip index lower on Friday, after one of its units was fined in a lawsuit related to its baby formula. Reckitt’s stock recorded its biggest percentage drop in more than two decades after an Illinois jury ordered its unit Mead Johnson to pay $60 million to the mother of a premature baby who died of an intestinal disease after being fed Enfamil.

The FTSE 100 index of top British firms dipped 0.2 per cent, in an otherwise uneventful session.

The UK’s domestically-oriented FTSE 250 edged up 0.1 per cent on Friday but recorded modest weekly losses.

Despite its dip on Friday, the FTSE 100 ended the week higher, snapping three straight weeks of losses as domestic data showed slowing wage growth and the economy returning to growth in early 2024.

Vodafone jumped 5.7 per cent after Swisscom said it will buy Vodafone Italia for €8 billion to merge the business with its Italian subsidiary Fastweb.

Europe

The pan-European STOXX 600 index ended 0.2 per cent lower after touching record highs in three of the past five sessions.

The Stoxx 600 clocked its eighth consecutive week of gains, supported by an array of upbeat corporate updates and expectations of interest rate cuts from the European Central Bank.

The index was weighed down by a 10.6 per cent drop in Vonovia shares after Germany’s largest landlord reported its biggest loss ever in 2023 following further writedowns on the values of its properties.

Among others Swisscom shares gained 4.9 per cent.

Germany’s HelloFresh reported a decline of 6.6 per cent in the number of active customers in the fourth quarter. Still the stock was the top gainer on the STOXX 600, rallying 10.9 per cent.

Polish fashion group LPP shares bottomed the Stoxx 600, falling 35.8 per cent after Hindenburg Research published a report alleging the firm’s sale of its Russian assets was fake.

New York

Wall Street’s main stock indexes fell on Friday, with the tech-heavy Nasdaq leading losses on worries that hotter-than-expected inflation figures could sully hopes of an early start to the Federal Reserve’s rate-easing cycle.

At 11:26am. ET, the Dow Jones Industrial Average was down 85.36 points, or 0.22 per cent, at 38,820.30; the S&P 500 was down 24.55 points, or 0.48 per cent, at 5,125.93; and the Nasdaq Composite was down 130.43 points, or 0.81 per cent, at 15,998.10.

Micron Technology rose 2.3 per cent after brokerage Citi raised its price target on the company to $150, the highest on Wall Street for the chipmaker, according to LSEG data.

Madrigal Pharmaceuticals jumped over 9 per cent after its oral drug won the US health regulator’s approval as the first treatment ever for a fatty liver disease known as non-alcoholic steatohepatitis.

Adobe slumped 14.2 per cent after it forecast second-quarter revenue below analysts’ estimates following stiff competition and weak demand for its AI-integrated photography, illustration and video.

Ulta Beauty fell 5.6 per cent after forecasting full-year profit below Wall Street estimates as elevated supply-chain costs and increased promotions hurt its margins. – Additional reporting; Reuters

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