US shares recover after Wednesday wobble

Investors pressed pause on a rally in European shares that came to a sudden halt on Thursday after Wall Street’s main indices suffered their biggest drop since September on Wednesday.

In the US, meanwhile, shares regained lost ground after the release of key economic data cemented bets on prospective interest rate cuts from the Federal Reserve.

Dublin

On lighter, end-of-year volumes, the Iseq index finished down 0.35 per cent, broadly in line with its European peers in what traders in Dublin described as a muted session.

Smurfit Kappa shrugged off criticism from activist fund Primestone Capital of its impending acquisition of US packaging rival WestRock. The UK fund, which has a 0.8 per cent stake in the cardboard box-maker, questioned the “strategic rationale” of the tie-up, urging Tony Smurfit and the company’s board to consider a combination with another US company, International Paper.

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Shares in Smurfit Kappa, which will give up its Dublin listing next year, fell just 0.03 per cent to €36.80 per share on the reports.

Bank of Ireland, meanwhile, traded 2.1 per cent lower at €8.17 per share while Permanent TSB bounced back to €1.72 per share, a 2.4 per cent rise.

Shares in Paddy Power owner Flutter fell 1.7 per cent to €162.40 in advance of its Wall Street listing at the end of January.

Europe

The Stoxx 50 and the pan-European Stoxx 600 indices notched matching 0.2 per cent declines in the wake of Wall Street’s Wednesday wobble.

Bank stocks were among the biggest winners on the day with Spanish BBVA and Santander as well as French lender BNP Paribas all adding around 0.03 per cent and 0.7 per cent on the session. It followed news that Commerzbank, which rallied 3 per cent at one point, had its €600 million stock buyback plan approved by the European Central Bank.

Otherwise, it was mostly a sea of red across Europe’s main bourses on Thursday with automakers Volkswagen, down 1.4 per cent, and Mercedes Benz, down 0.4 per cent, among the downward movers.

London

The benchmark FTSE 100 index and the mid-cap FTSE 250 struggled to maintain momentum, with both falling by around 0.3 per cent on the session.

Personal goods and automakers were among the top sectoral laggards, down 2 per cent and 1 per cent, respectively, while a 0.5 per cent rise in industrial metal miners helped limit losses.

Fashion brand Burberry fell to the bottom of the FTSE 100, shedding 4 per cent on the session, followed supermarket tech company Ocado, also down around 4 per cent.

British American Tobacco, Halma and United Utilities Group fell between 0.6 per cent and 2.4 per cent as their shares traded without the entitlement for dividend.

New York

On Wall Street, the Dow Jones Industrial Average rose 0.65 per cent while, the S&P 500 gained 0.75 per cent to 4,733.4 and the Nasdaq Composite added almost 0.9 per cent as investor anxieties softened following the release of key US economic data.

A Commerce Department report showed the final gross domestic product (GDP) estimate for the third quarter stood at 4.9 per cent, compared with previous estimates of 5.2 per cent, cementing bets that the US Federal Reserve could soon look to begin cutting rates. A separate report showed the number of Americans filing new claims for unemployment benefits rose marginally last week, suggesting underlying strength in the economy as the year winds down.

Micron Technology forecast quarterly revenue above market estimates, and its shares jumped 7.8 per cent on signs of a memory chip recovery in 2024 after one of the most significant downturns in years.

Meanwhile, US electric vehicle (EV) makers like Tesla, Nikola and Lucid Group added between 1 per cent and 2.4 per cent after a report said the United States was considering tariff hikes on Chinese EV manufacturers. – Additional reporting: Bloomberg, Reuters

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