Stocks struggle amid UK bond market jitters

European shares tumbled on Wednesday as investors mulled the Bank of England’s latest comments on bond purchases and concerns about energy security resurfaced after a leak on a pipeline carrying oil from Russia to Europe was detected. US markets, meanwhile, looked to snap a losing streak as investors waited for key inflation data and the start of the earnings season.

Dublin

Irish stocks were again under pressure late in Wednesday’s session as the Iseq index fell more than 1.2 per cent in trading, largely due to downward moves by a number of the largest cap companies, traders in Dublin said.

After recovering somewhat from oversold levels in recent weeks, shares in insulation specialist Kingspan gave up 4.4 per cent following a decline of nearly 0.7 per cent on Tuesday, closing the session at €45.36 per share. Building materials giant CRH fell 1.8 per cent to €32.7, while house-builders Cairn Homes and Glenveagh declined by just over 1 per cent, closing at €11.87 and €0.86 per share respectively.

Travel and tourism-adjacent stocks continued to tumble after the International Monetary Fund warned of the potential for a global recession in 2023. Shares in Ryanair, down 0.06 per cent on Tuesday, fell a further 0.3 per cent on Wednesday to €10.28 per share. Ferry operator Irish Continental Group, meanwhile, declined by almost 4.8 per cent to €3.77.

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Dalata, the largest hotel operator in the State, extended its recent weak run, down more than 2.4 per cent to €2.80 per share.

AIB, down 1.6 per cent, closed near a session low at €2.78. Bank of Ireland was essentially flat on the day at €7.14.

London

The benchmark FTSE 100 index slipped again on Wednesday as investors weighed the consequences of the Bank of England’s commitment to ending bond purchases, accelerating a selloff in UK government bonds. The central bank reiterated on Wednesday morning that it “has made clear from the outset its temporary and targeted purchases of gilts will end on October 14th”.

UK property, construction and banking stocks helped drag the index down by close to 1 per cent after Barratt Developments, Britain’s largest housebuilder, reported a slump in new home reservations this quarter. Shares in the company fell as much as 8 per cent in early trading, closing down more than 6.7 per cent.

Rival housebuilder Persimmon, down more than 60 per cent so far this far, slid more than 6 per cent in Wednesday’s session.

Bank shares also suffered with Lloyds down 5.8 per cent, while Ulster Bank-owner NatWest group tumbled more than 4.1 per cent.

Moving in the opposite direction was pest control giant Rentokil, up 2.6 per cent after completing the $1.3 billion acquisition of rival Terminix.

Europe

European stocks slid further in the session as investor anxieties over recession risks and energy security reared their heads. The pan-European Stoxx 600 gave up 0.5 per cent, its sixth consecutive decline, while the German Dax fell 0.4 per cent and the French Cac 40 tumbled nearly 0.3 per cent.

However, indexes cut some of the losses they had registered following a report that showed US producer prices increased more than expected in September, suggesting inflation remains stubbornly high. The data comes ahead of a highly anticipated US consumer prices report for September on Thursday.

Financials, energy and industrials were the biggest drags on the index on Wednesday, which is on course for its worst annual performance since 2008.

Philips shares fell 12.3 per cent to their lowest in a decade as the Dutch health tech company said supply chain problems would hit sales, and wrote down €1.3 billion of the value of its sleep apnoea business.

Credit Suisse dropped 4.2 per cent after Bloomberg reported the US justice department is investigating whether the Swiss lender continued helping US clients hide assets from authorities, eight years after it paid a $2.6 billion (€2.7bn) tax-evasion settlement.

Among gainers, Hennessy-maker LVMH rose 1.9 per cent after the French luxury goods giant beat market forecasts for third-quarter sales.

New York

Wall Street’s main indexes were on track for modest gains by closing bell in Dublin, with both the Nasdaq Composite and the S&P 500 essentially flat on the session. The Dow Jones Industrial Average, meanwhile, rose 0.35 per cent.

PepsiCo jumped after lifting its forecast for the year on the back of better-than-estimated third-quarter profit. Moderna surged after Merck said it would exercise an option to work in partnership with the biotech on a messenger RNA cancer vaccine. – Additional reporting by Reuters, Bloomberg