Global stocks tumble as fears of worldwide recession grow

Global stocks tumbled on Tuesday while oil prices sank on fears about the potential for a worldwide recession as central banks rapidly increase interest rates in an effort to tame inflation.

Dublin

Euronext Dublin was down 0.9 per cent, largely in line with its international peers, with consumer-facing stocks under pressure.

Dalata – the biggest hotel operator in the State – continued its weak run of late, shedding 4 per cent of its share value. Staying with tourism and hospitality, low-budget airline Ryanair was flat, underperforming its peers.

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Box-maker Smurfit Kappa gave up some of Monday’s gains, finishing the day down 2 per cent. “It’s still had a pretty good few days, having had a very strong up day on Monday,” noted one trader.

AIB was up 0.7 per cent, outperforming the rest of the sector, which was down 1.5 per cent. “As the Government continues to wind down its stake, the shares are still performing really strongly, which is quite interesting,” said the trader.

Among the homebuilders, Cairn Homes was up more than 2 per cent on the day after trading a “well-above average” six million shares. Building materials group CRH outperformed its peers, down just 0.6 per cent on the day.

Elsewhere, Kerry Group was down 1.6 per cent, while Paddy Power Betfair parent Flutter Entertainment was down 1 per cent, in line with its US peers.

London

The FTSE 100 took a further hit after the Bank of England stepped in for the second day running to prop up the troublesome gilt market.

The bank said it would be widening the scope of its emergency bond-buying programme to include purchases of index-linked gilts, just a day after doubling its daily purchase limit to £10 billion (€11.4 billion).

This week, gilt yields have jumped back up and nearly reached the levels seen two weeks ago when the bank was first forced to step in.

The FTSE 100 was dragged down by losses for insurance giants Legal & General and Aviva in the wake of turbulence in the gilt market. The index dropped 1.06 per cent.

In company news, pub group Marston’s reassured investors that it had not seen any change in behaviour from punters against cost-of-living pressures, suggesting that people would be more likely to ditch big-ticket purchases before sacrificing social trips.

The company’s boss, Andrew Andrea, said that it was looking forward to stronger sales during the 2022 World Cup. Marston’s share price was up 5.79 per cent at the end of the day.

Sofa seller ScS also saw its share price edge up by 3.29 per cent after announcing a strong performance in the latest financial year.

Meanwhile, shares in publisher Reach dipped 1 per cent after the group said it took a financial hit from the queen’s death as many advertisers suspended national campaigns during the mourning period.

Europe

The pan-European Stoxx 600 index lost 0.70 per cent, while the French Cac had also dipped by 0.13 per cent.

Elsewhere in Europe, the German Dax was down 0.43 per cent after the International Monetary Fund warned that the country could see its economy shrink in the New Year.

New York

US stocks traded off session lows as investors weighed risks that inflation and hawkish Federal Reserve policy would erode corporate earnings and economic growth.

Both the top indices had made gains when European markets closed. The S&P 500 was up 0.17 per cent while Dow Jones was 0.88 per cent higher.

The S&P 500 retraced some losses after a New York Fed survey showed near-term consumer inflation expectations cooled though were less optimistic longer-term.

The benchmark earlier touched the lowest intraday level since November 2020. The Nasdaq 100 underperformed, dropping 1 per cent. Meta Platforms fell with other big tech names sensitive to rising rates.

Treasuries were mixed, with yields on the short end of the curve falling from multiyear highs. (Additional reporting: Agencies)