Stocks fall as US data dampen Christmas spirit

Stocks stalled globally on Thursday after fresh US data pointed to a resilient economy, driving concern that the Federal Reserve has a long way to go to redress price growth. US crude oil futures, meanwhile, held above $78 (€74) a barrel, extending their gain into a fourth day and the dollar gained.

DUBLIN

After strengthening over the course of several sessions, the Iseq index shed more than 0.8 per cent on Thursday.

With strong US economic data indicating that interest rates may have to stay higher for longer to cool rampant price inflation, the Irish banks — which are in line to benefit from the higher interest rate environment — were among the few names to finish in the green. AIB added 2.5 per cent to close the session at €3.64 per share and Bank of Ireland up 1.2 per cent at €8.82.

The Biggest business stories of 2022 (Part 1)

Listen | 41:39

Otherwise, it was a sea of red in Dublin with most stocks flat or down modestly in what was a low-volume session.

Swiftonomics: can Taylor Swift boost her record label’s share price?

---

‘This is a land that is all about giving people a go’

---

PTSB most exposed Irish lender to competitive threat from Spanish move into market

---

Stella Li of Chinese car maker BYD: ‘We don’t want to engage in a price war’

---

Builders and building materials companies gave up some of their recent gains, with Cairn Homes down 2.6 per cent to 83 cent per share and Glenveagh losing 1 per cent to finish Thursday at 85 cent.

Construction materials giant CRH shed 1.2 per cent to finish the session at €37.15 while insulation maker Kingspan — down 51 per cent this year — gave up Wednesday’s gains, losing close to 1 per cent stand at €49.89 per share at the closing bell.

LONDON

The blue-chip FTSE 100 index lost a modest 0.4 per cent over the session despite briefly touching its highest level in a week early on Thursday as energy and financial stocks gained.

It was a mixed bag for financial stocks amid concerns that the US Federal Reserve may still have a job of work on its hands to cool red-hot US inflation. Insurance groups Admiral and Prudential were among the biggest risers, up between 0.4 and 0.7 per cent on the day. HSBC, meanwhile, was flat on the session while Lloyds and Barclays gave up between 0.4 and 0.6 per cent respectively.

Retailer JD Sports shed more than 1 per cent after rising to the top of the index on Wednesday. Boosted in the first three sessions of the week by the Christmas shopping period, retailer Next and supermarket technology company Ocado gave up 1.3 and 3.3 per cent respectively.

Airlines, meanwhile, were also soft on the session with Aer Lingus owner IAG off by close to 1 per cent and EasyJet down more than 2.1 per cent.

EUROPE

European stocks reversed an earlier rally to follow Wall Street lower after solid economic data doused hopes of a dovish Fed pivot any time soon.

The pan-European Stoxx 600 index lost more than 1 per cent while the German Dax index was off by more than 1.3 per cent. The French Cac 40 also gave up almost 1 per cent.

Among the biggest movers was Italian utility Enel, down 27 per cent, which shed more than 1 per cent on the session. Reuters reported in the afternoon that the Italian government is preparing a €12 billion bank credit guarantee for the company in case a potential spike in energy prices affects derivative trades and causes a rise in the group’s margin calls.

Other energy stocks — including Uniper, which was nationalised by the German government this week — also felt the pinch.

French pharma giant Sanofi, meanwhile, added more than 0.2 per cent after the rollout of its long-awaited Covid-19 vaccine.

NEW YORK

US stocks continued to decline as investors contended with data validating the Federal Reserve’s assertion that the economy is robust enough to withstand more tightening.

The S&P 500 fell as much as 2 per cent and the Nasdaq 100 dropped more than 3 per cent with interest rate-sensitive megacaps weighing heaviest on the tech-laden index. A gloomy outlook from chipmaker Micron Technology knocked its shares and weighed on both indexes. The company’s warning counteracted some of the optimism fuelled on Wednesday by data showing US consumer confidence at an eight-month high and a further decline in inflation expectations.

CarMax also fell after reporting earnings that fell short of already depressed expectations, deepening concerns over the weakening US used-car market. The dollar gained. — Additional reporting: Bloomberg, Reuters