Global markets fall as fears of recession spook investors

Strong showings in the banking sector were not enough to lift markets on Monday as fears of economic recession spooked investors.

Dublin

Euronext Dublin ended the day marginally up on what was a muted bank holiday for the market.

AIB was up 2 per cent after posting results on Friday which showed the bank increased net profit 74 per cent for the first half of the year, to €477 million, driven by the release of €309 million of loan loss provisions. Bank of Ireland climbed 1 per cent.

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Among the airlines, Ryanair was flat, while Wizz Air was stronger. Aer Lingus parent International Airlines Group and EasyJet were both weaker.

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Elsewhere, construction materials giant CRH was down 0.6 per cent, while insulation specialist Kingspan was up 0.6 per cent, but volumes were low. Paddy Power Betfair parent Flutter Entertainment finished the day up 1.5 per cent.

London

A strong showing from HSBC and the banking sector was not enough to steer the FTSE to gains.

HSBC shook off nervousness in the Asian markets to close the day significantly higher after the banking giant came out fighting against calls by its largest shareholder for a break up of the group as it claimed the move would be costly and risky.

HSBC finished 31.5p higher at 545.2p on Monday. Nevertheless, the FTSE 100 ended the day down 10.01 points, or 0.13 per cent.

Elsewhere in company news, JD Sports moved slightly higher despite agreeing to a cut-price sale for its Footasylum business. Shares were 1.2p higher at 130.75p at the close after it told shareholders it will sell Footasylum to Aurelius Group for £37.5 million (€44.9 million), after competition regulators forced it offload the retailer it originally snapped up for £90 million in 2019.

Wealth management firm Quilter surged during the session after weekend reports that NatWest is considering a takeover.

Quilter’s shares rose by 15.3p to 120.3p after the Mail on Sunday reported the banking giant is in the early stages of putting down a firm bid.

The biggest risers in the FTSE 100 were Pearson, up 96p at 852.6p, HSBC, up 31.5p at 545.2p, Ocado, up 36.6p at 876p, Avast, up 15p at 480p, and Auto Trader, up 16.6p at 646.2p.

The biggest fallers of the day were Melrose, down 8.75p at 151.8p, Anglo American, 117.5p at 2,832.5p, Intertek, down 145p at 4,231p, Prudential, down 32.4p at 973.6p, and IAG, down 2.6p at 116.14p.

Europe

European stocks were essentially unchanged as fears of recession were mitigated by strong earnings from banking group HSBC.

The pan-European Stoxx 600 index rose 0.01 per cent and MSCI’s gauge of stocks across the globe gained 0.31 per cent.

Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been a nervous start to the new month for markets in Europe with decent gains for financials after HSBC drew down the curtain on a positive first half for the UK banking sector, as a whole.”

New York

The Dow and the S&P 500 fell in volatile trading as a strong earnings-driven rally from last week lost steam, with losses in economy-sensitive sectors being countered by gains in shares of Boeing and Tesla.

The S&P 500 and the Nasdaq posted their biggest monthly percentage gains since 2020 in July on stronger-than-expected second-quarter results and on hopes the Federal Reserve need not be as aggressive with interest rate hikes as some had feared.

The Nasdaq Composite was up 0.28 per cent, boosted by 2.7 per cent rise in shares of Tesla.

Offering support to the Dow and S&P 500, Boeing gained 5.4 per cent after a Reuters report the US aviation regulator approved the planemaker’s inspection and modification plan to resume deliveries of 787 Dreamliners.

PerkinElmer jumped 9 per cent after the medical diagnostic firm said it will sell some of its businesses along with the brand name to private equity firm New Mountain Capital for up to $2.45 billion (€2.4 billion) in cash. — Additional reporting Reuters/Bloomberg