Mixed bag for equities as difficult month ends with no sign of inflation waning

Global equities were mixed on Tuesday and bonds wrapped up a difficult month, with further price declines, as more evidence of stubborn inflation added to expectations that central banks will not cut rates any time soon.

DUBLIN

Euronext Dublin was flat at close of business on Tuesday in advance of a busy few days for Irish companies reporting results.

Dalata – the largest hotel operator in the State – finished the day up 3.8 per cent after its 2022 results showed it generated revenues of €515.7 million for the year, up 20 per cent on pre-pandemic figures in 2019.

“All the metrics read well and were ahead of consensus,” noted a trader. “It also expects to reintroduce a dividend in the second half of 2023, so all of that bodes well for Dalata and we saw buyers there.”

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Healthcare services company Uniphar sank 3.5 per cent even as its 2022 results showed revenue and profit rose, with strong performance and growth across its divisions.

“It drifted lower later in the afternoon and was maybe a little bit behind where people were expecting it to be,” said one trader.

The airline sector was a mixed bag, with Ryanair underperforming before finishing the day down 2 per cent. EasyJet and Aer Lingus parent International Airlines Group were down 1 per cent.

In finance, AIB and Bank of Ireland were up almost 3 per cent on what was a strong day across Europe for the banks.

Among the food names, Glanbia was up 1 per cent in advance of results on Wednesday, while Kerry Group was down 0.5 per cent.

LONDON

The FTSE 100 tumbled 0.8 per cent while the pound jumped higher as prime minister Rishi Sunak visited Northern Ireland in an effort to sell the benefits of his new Brexit breakthrough deal.

The index, which is particularly internationally focused, tumbled back down after enjoying a resurgence on Monday. It was dragged down by results for grocer Ocado, which reported soaring losses amid reports shoppers have been switching to cheaper brands in the face of cost pressures.

Disappointing company updates from chemicals company Croda and quality-control specialist Intertek also weighed on the UK’s leading index.

EUROPE

The pan-European Stoxx 600 index fell 0.15 per cent on the day, but was still on track for a roughly 2 per cent gain this month, its fourth positive month in five.

The German Dax slipped by 0.11 per cent and the French Cac was down by 0.38 per cent at close.

Earlier, data showed France’s EU-harmonised consumer prices rose to a record 7.2 per cent in February, while Spain’s EU-harmonised 12-month inflation stood at 6.1 per cent, up from 5.9 per cent in January and above the 5.5 per cent expectation from analysts polled by Reuters.

Two-year German bond yields are heading for their largest monthly rise for the month of February since 1991, while two-year UK gilts are heading for their biggest February rise since 2005.

NEW YORK

The benchmark S&P 500 slipped and the main US indices were set for monthly losses as treasury yields rose, with investors bracing for the possibility of interest rates remaining high for a prolonged period.

The blue-chip Dow Jones slid as Goldman Sachs fell 2.5 per cent after chief executive David Solomon said the bank is considering “strategic alternatives” for its consumer business, while the tech-heavy Nasdaq stayed afloat.

Meta Platforms rose 3.2 per cent after the Facebook parent said it was creating a new top-level product group focused on generative artificial intelligence.

Target Corp was 2.3 per cent ahead after the big-box retailer reported a surprise rise in holiday-quarter sales but cautioned on 2023 earnings due to an uncertain US economy.

Zoom Video Communications climbed 1.7 per cent after it forecast annual profit above Wall Street estimates and said it will integrate more AI into its products.

Norwegian Cruise Line slid 11.5 per cent after the cruise operator’s full-year profit forecast fell short of estimates, as it feels the squeeze from soaring fuel and labour costs.

– Additional reporting: Agencies