Global share prices continued to slide on Tuesday albeit at a slower pace following Monday’s bruising market sell-off that was triggered by recession anxiety, concerns about aggressive monetary tightening by central banks and surging inflation.
Investors are betting on a second consecutive interest rate hike when the US Federal Reserve’s open market committee concludes its meeting tomorrow after unexpectedly high inflation figures from the US last Friday.
European stocks steadied in early trading yesterday but remained in negative territory at the closing bell after Monday’s rout.
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Irish shares failed to see much of a bounce after Monday’s sell-off. The Iseq index closed down 1.5 per cent, underperforming many of the broader European indices after falling 2.4 per cent on Monday.
Buoyed by the expectation that the ECB will raise interest rates next month for the first time in more than a decade, the two main Irish banks made some of the biggest positive contributions. AIB jumped 1.3 per cent to finish the day at €2.40 per share while Bank of Ireland climbed 0.6 per cent to €6.04 per share.
Stocks exposed to the broader economy remained weak under heavy selling pressure, however. Smurfit Kappa fell 3.7 per cent to €32.33 per share. Hotel group Dalata was down 3 per cent to €3.01 per cent per share while Paddy Power-owner Flutter Entertainment was down 2.5 per cent to trade at €93.48.
Construction and building materials shares also failed to halt the slide. Housebuilder Glenveagh was down 1.6 per cent to trade at €0.93 per share while building materials group CRH was down 0.03 per cent to €34. Shares in insulation giant Kingspan were down 3.4 per cent to €70.00.
LONDON
Investors hoping for a reprieve after days of malaise on London’s markets were treated to a wild ride on Tuesday.
The FTSE finished the day down 0.3 per cent, settling at 7,187.46 after falling as low as 7,135 earlier in the session and following drops in excess of 100 points in each of the three previous sessions.
With the price of Brent crude oil rising 1.8 per cent to €124.46 per barrel, the performance of oil majors Shell and BP, and their rival Harbour Energy have helped the index avoid the heavier falls seen in Europe. Harbour, among the session’s biggest movers, was up 8.2p to 363.4p.
After the business agreed to be bought by a consortium of companies including Australia’s Kinetic Holdings and Spanish investor Globalvia, bus and train operator Go-Ahead Group followed up its strong performance from Monday. Shares in the transport company jumped nearly 17 per cent in the session after gaining 150p to trade at 1,360p per share on Monday.
EUROPE
European stocks tumbled for the sixth day in a row, marking their longest losing streak since the early days of the pandemic in March 2020.
The Stoxx Europe 600 Index closed 1.3 per cent lower, sinking to the lowest since February 2021 as investors bet on economic stagnation and aggressive monetary policy tightening by the ECB more than the coming weeks and months. Media and construction sectors led declines, while banks and energy outperformed.
However, the gauge fell into so-called oversold territory on Tuesday with 14-day relative strength index of the Stoxx 600 dropping to 29. A dip below 30 is seen by some market participants as a sign that the sell-off has gone too far and the security is poised for a rebound.
The German Dax index dropped 0.9 per cent, while the Cac 40 in Paris fell 1.1 per cent.
Among the biggest movers within individual European markets, French IT company Atos sank 23 per cent to trade at €14.40, the most on record, after the company announced the departure of newly arrived CEO Rodolphe Belmer and a separation into two publicly listed companies.
NEW YORK
After the benchmark S&P 500 index plunged into bear market territory on Monday, US investors continue to navigate choppy waters as the Fed began its two-day meeting.
The gauge swung between gains and losses, with tech shares outperforming other sectors. Oracle gained 8.7 per cent after publishing a new forecast suggesting its efforts to move customers more than to the cloud was gaining momentum. Recovering somewhat from Monday, heavyweights Apple, Tesla, Twitter and Microsoft also gained between 0.4 per cent and 2.6 per cent in the session.
Considered a bellwether for the US economy, FedEx Corp was up more than 15 per cent after increasing its dividend and announcing a boardroom shake-up. — Additional reporting by Bloomberg, Reuters, PA
