Global stocks sink as rally fizzles out

European stocks came under renewed pressure on Friday as Thursday’s relief rally faded from view. Reports that four US banks would join forces to pump $30 billion (€28bn into stumbling lender First Republic failed to generate much optimism despite a brief early morning rally. Sentiment across global markets remained fragile in the aftermath of Silicon Valley Bank’s collapse one week ago.

DUBLIN

In a characteristically light St Patrick’s Day session on the Euronext Dublin, the Iseq index, down close to 2 per cent, gave back most of Thursday’s 2.3 per cent gain.

Cardboard boxmaker Smurfit Kappa, down 3.4 per cent to €32.18 per share, was among the biggest movers on the day. Traders in Dublin said it was a sectoral move, with the company’s main British competitors in the packaging sector, Mondi and DS Smith, also weaker on the session.

Having regained some lost ground on Thursday, Irish banks also came under pressure on Friday. Permanent TSB tumbled more than 5.5 per cent to close at €2.39, while AIB was off by 2.1 per cent to €3.54 per share. Bank of Ireland was trading at almost €8.95 by closing bell, down 1.1 per cent.

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Weak macro sentiment was also in evidence in the travel and leisure sector. Ryanair followed most of its European peers, falling 2.8 per cent to €13.99. Hotel group Dalata was off by than 4.8 per cent to €4.09 per share, while Irish Ferries-owner Irish Continental Group gave back nearly 2.2 per cent €4.51.

LONDON

A flurry of optimism in London markets on Friday morning quickly ran out of steam, with the FTSE 100 index down 1 per cent on the session.

As part of a wider trend in the European airline sector amid declining economic optimism, EasyJet shed more than 5.4 per cent, while Aer Lingus-owner IAG was off by close to 2.3 per cent. London-listed package holiday company Tui, down 5.7 per cent on the session, also felt the sting of pessimism, while hotel giant Intercontinental Group shed 2 per cent.

Banks came in for more scrutiny from investors after Thursday’s rally, with Barclays, Lloyds and HSBC down between 2 and 3 per cent.

Moving the other way, oil major Shell was up 0.2 per cent despite tumbling crude prices, while miners Anglo American and Glencore added 1 per cent and 2 per cent respectively.

EUROPE

Both the pan-European Stoxx 600 and blue-chip Stoxx 50 indices turned around 1.2 per cent lower, with the French Cac 40 and the German Dax off by around 1.4 per cent.

Shares in troubled Swiss lender Credit Suisse resumed a decline, falling as much as 13 per cent after the idea of a forced combination with a larger rival UBS was shot down. The stock had rallied 19 per cent Thursday after the Swiss central bank stepped in with support.

The big names in banking all took a hit, with Spain’s Santander and BBVA down 4.6 per cent and 3.6 per cent, while Dutch ING also tumbled 3.6 per cent. France’s BNP Paribas, meanwhile, shed 2 per cent.

German pharma giant Bayer and Dutch industrial Phillips, up between 0.3 and 0.5 per cent, were among the few larger-caps to finish in green.

NEW YORK

Wall Street’s main indices fell more than 1 per cent on Friday as efforts to provide lifelines to some regional lenders failed to assuage investor fears of a broader banking crisis.

Big banks including JPMorgan Chase and Morgan Stanley had stepped in to inject $30 billion into First Republic on Thursday, helping calm some nerves and lifting US stocks. The boost was short-lived, however, and fears of a banking crisis gripped the market on Friday, with shares of First Republic, which also suspended its dividend payout, dropping 24.5 per cent.

The local fallout from Silicon Valley Bank’s collapse continued with its regional peer PacWest Bancorp, down 13.1 per cent, while Western Alliance slid 16.9 per cent.

Big banks including JP Morgan, Citigroup and Wells Fargo also declined between 3 per cent and 4.1 per cent.

On a mixed day for tech stocks Apple dipped 0.2 per cent, while Microsoft rose 1 per cent. Having helped the Nasdaq remain positive this week, shares in Facebook-owner Meta gave back more than 2.8 per cent on Friday. – Additional reporting: Bloomberg, Reuters