European shares fall as economic gloom deepens

European shares fell on Friday and posted a weekly loss as the highest-ever jump in German producer prices in July added to gloom over the economic outlook for the region’s biggest economy and rekindled fears of a recession.

Dublin

The Irish index of shares fell, mirroring the wider sentiment across Europe. The index closed 0.7 per cent lower at 7,167, dragged lower by declining shares in banking and building. AIB and Bank of Ireland both slipped, with the latter losing almost 3 per cent to close at €5.83, and AIB declining 0.6 per cent to end the week at €2.20.

Bellwether stock CRH lost 1.2 per cent to close at €38.40, while Ryanair was 3.8 per cent lower, closing the session at €12.30. Smurfit Kappa ended the week at €35.95, down 1.15 per cent.

Kingspan was one of those bucking the general trend, gaining 6 per cent to €61. Permanent TSB was up 1.27 per cent, finishing at €1.60.

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London

Shares in London’s top index closed Friday in the green, capping off a positive week as the falling pound put wind in the sales of shares, with the FTSE 100 finishing up 0.1 per cent, or 8.52 points, to 7,550.37.

Healthcare companies outperformed. AstraZeneca and GSK, which earn most of their revenue in dollars, were close to the top of the index.

But concerns were raised for the future of Cineworld. The Wall Street Journal claimed the chain is preparing for a bankruptcy that could come in just a few weeks. The company declined the comment on the report, which said it had hired lawyers and consultants to help with the process. Shares in the company closed down by more than 58 per cent after the news. It has 127 cinemas in the UK and employs 28,000 people in 10 countries.

The biggest risers on the FTSE 100 were Reckitt, up 160p to 6,674p; AstraZeneca, up 236p to 11,250p; Avast, up 11.6p to 698.8p; Unilever, up 66p to 4,004p; and GSK, up 23.2p to 1,425.2p.

The biggest fallers on the FTSE 100 were IAG, down 6.06p to 112.56p; Persimmon, down 71p to 1,670p; Entain, down 53p to 1,319p; Howden Joinery, down 24p to 634.6p; and Segro, down 38p to 1,018p.

Europe

The pan-European Stoxx 600 ended 0.8 per cent lower, with travel stocks leading the declines. Germany’s Dax lost 1.1 per cent, falling the most among its continental peers, and its 10-year yields rose to their highest in four weeks.

The benchmark index is set to end the week about 1 per cent weaker as investors weigh weak economic data, the impact of tighter monetary policy, fears of spiralling inflation and shrinking economies across the region. It gained more than 1 per cent last week.

French catering and food services group Sodexo fell 1.3 per cent after Jefferies cut the stock to “hold” from “buy” to factor in a cautious recessionary scenario over fiscal year 2023-2024.

Just Eat Takeaway.com surged 25.8 per cent to top the Stoxx 600 after agreeing to sell 33 per cent stake in Brazil’s iFood to technology investor Prosus for up to €1.8 billion ($1.8 billion). Prosus shares dropped 1.3 per cent.

FLSmidth jumped 9.8 per cent after raising its annual sales outlook as the mining equipment and cement maker beat second-quarter earnings forecasts.

New York

Wall Street stocks were lower on Friday, with US Treasury yields and the dollar rising, as traders weighed continued economic risks and action the Federal Reserve might take on inflation.

High-growth and technology stocks such as Amazon and Alphabet declined nearly 2 per cent. Banks fell and were on track to end the week lower, potentially snapping their six-week winning streak. And an earnings miss by heavy equipment maker Deere & Co added to the risk-off mood.

The Dow Jones Industrial Average fell 0.61 per cent to 33,791.09, the S&P 500 lost about 1 per cent to 4,239.33 and the Nasdaq Composite dropped 1.71 per cent to 12,743.60. — Additional reporting: Reuters, PA

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