Business

European shares log weekly declines as investors temper interest rate expectations

Dublin market up slightly with shares of Kerry Group advancing 2 per cent

Traders work on the floor of the New York Stock Exchange during afternoon trading. Photograph: Michael M Santiago/Getty Images

Ciara O'Brien
Fri Jan 19 2024 - 18:57

European shares logged weekly declines on Friday as investors tempered their expectations around major central banks reducing borrowing costs this year, with the focus now squarely on the European Central Bank’s next policy meeting.

Dublin

The Dublin market was up slightly at the end of the week, Banking shares were mixed, with AIB down half a per cent and Bank of Ireland up 0.4 per cent over the day. Permanent TSB slipped 2.4 per cent to end the week at €1.63.

Kerry Group saw its shares advance 2 per cent, while home builders Glenveagh and Cairn saw their shares rise 1.5 per cent and 0.5 per cent respectively. Flutter Entertainment, which is preparing for its dual listing in New York at the end of the month, was up 2.67 per cent

Travel stocks were also muted. Ryanair shares dipped 1.2 per cent to €17.96, while ferry group Irish Continental was down over the day at €4.575 and hotels group Dalata fell half a per cent.

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London

British equities ended Friday mixed, as gains in non-life insurers stocks were offset by a sell-off in automobile and parts shares, while weaker-than-expected retail sales data further tempered expectations over the timeline for rate cuts.

The FTSE 100 was flat, but marked its third weekly decline and the biggest in three months. The domestically-focused FTSE 250 index reversed early gains to end the day 0.4 per cent lower, also logging a weekly loss.

In individual stocks, 4imprint Group jumped 12 per cent to become the top gainer in the midcap index after the advertising and marketing company raised its profit forecast.

The broader media index gained 0.4 per cent on the news. Wincanton rallied 48 per cent to a 2½-year high after CEVA Logistics, a unit of French shipping group CMA CGM, said it would buy the British logistics firm in an all-cash deal worth nearly £600 million.

Europe

The pan-European Stoxx 600 index ended 0.3 per cent lower after rising as much as 0.5 per cent during the day.

The benchmark index clocked a decline of 1.6 per cent this week after hawkish remarks from ECB policymakers prompted traders to rethink expectations for interest rate cuts.

Rate-sensitive real estate was the worst-performing sector this week, followed closely by basic resources

Focus will now shift to the ECB’s upcoming policy meeting on January 25th where the central bank is broadly expected to keep rates steady, though comments from its officials about its rate outlook would be scrutinised.

Among major movers, Teleperformance gained 8.6 per cent after Stifel upgraded the teleservices firm’s to “buy” from “hold”.

Ericsson and Nokia were laggards, down 4.0 per cent and 2.9 per cent, respectively.

New York

US stocks were lifted by semiconductor shares on Wednesday, and the benchmark Treasury yield continued to climb to a more than one-month high amid cooling optimism over imminent interest rate cuts from the Federal Reserve.

All three major US stock indexes were higher, and were on track for weekly gains.

A sunnier-than-expected consumer sentiment reading added to the list of solid economic data released this week, notably retail sales and jobless claims.

The Dow Jones Industrial Average rose 116.06 points, or 0.31 per cent, to 37,584.67, the S&P 500 gained 16.72 points, or 0.35 per cent, to 4,797.66 and the Nasdaq Composite added 76.09 points, or 0.51 per cent, to 15,131.73.

Among individual movers, State Street advanced 4.7 per cent after topping quarterly revenue expectations.

Spirit Airlines rebounded 20.1 per cent as it assessed options to refinance its 2025 debt maturities, amid analysts’ concerns over the airline’s ability to stay afloat.

iRobot slumped 26.9 per cent, after a report said the European Union’s competition watchdog plans to block Amazon’s $1.4-billion acquisition of the robot vacuum maker. – Additional reporting: Reuters

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist

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