Markets

Global stocks slip as US inflation data spooks investors

Euronext Dublin finished the day down 0.3% as it was dragged lower by homebuilders and hotels group Dalata

A hotter-than-expected inflation readout dented hopes of imminent interest rate cuts, hitting rate sensitive megacap stocks and chipmakers. Photograph: Michael Nagle/Bloomberg

Colin Gleeson
Tue Feb 13 2024 - 18:20

World stock market indices dropped while the dollar hit three-month peaks and treasury yields climbed on Tuesday after data showed US inflation slowed less than expected in January.

Dublin

Euronext Dublin finished the day down 0.3 per cent as it was dragged lower by home builders. Cairn Homes and Glenveagh Properties were down 0.8 per cent and 1.6 per cent respectively at close of business. Cairn earlier announced the appointment of Richard Ball as its new chief financial officer, with Mr Ball due to take up his new role in April.

The index was also weighed down by Dalata – the biggest hotel operator in the State – which slipped 2.4 per cent. Staying with tourism and leisure, budget airline Ryanair was up 0.2 per cent at the end of the day’s trading.

There were mixed fortunes for the banks with AIB climbing 0.5 per cent, but Bank of Ireland and Permanent TSB falling 0.9 per cent and 2.4 per cent respectively.

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Among the other main movers, box-maker Smurfit Kappa finished the day down 0.7 per cent, while Kerry Group climbed 0.4 per cent and insulation specialist Kingspan saw its share price dip by 1.2 per cent.

London

The FTSE 100 had a cautious morning of trading but quickly dropped to its lowest point this month after hotter-than-expected US inflation figures. The data suggested hopes of interest rate reductions in the near term could be premature and particularly dented housebuilders amid concerns about the mortgage market.

London’s top index moved 0.81 per cent lower, with Taylor Wimpey, Barratt Developments and Persimmon all notable fallers.

Shares in Tui were down 1p to 578.5p despite the travel giant cutting its losses for the latest quarter. The holiday operator, which also urged its shareholders to vote to abandon the company’s London listing and focus purely on Germany, said its pretax loss was cut from €272.6 million in the final three months of 2022 to €103.1 million in the same period in 2023.

Pharmaceutical giant GSK made gains after the stock received an upgrade from brokers at Citi. Shares in the business lifted by 15.4p to 1,641.8p after Citi said the drugs giant may have rediscovered its “mojo”.

Superdry closed 4.3p lower at 30.9p as investors continue to await news for talks over a potential takeover deal for the troubled fashion chain.

Europe

On the continent, concerns over the inflation picture also drove weak sentiment, with traders on edge in advance of inflation data for the UK and other key economies still to come.

The German Dax index was down 0.92 per cent at the close and the Cac 40 closed down 0.84 per cent.

The MSCI world equity index, which tracks shares in 49 nations, lost 1.21 per cent. The Europe-wide Stoxx 600 index was last down 1.2 per cent, having traded 0.47 per cent lower before the data.

New York

Wall Street’s main indices slid, hitting one-week lows, after the inflation reading drove US treasury yields higher, pushing back market expectation of imminent interest rate cuts.

Rate-sensitive megacaps like Microsoft, Alphabet, Amazon and Meta Platforms lost between 0.7 per cent and 1.6 per cent, as yields on treasury notes spiked to two-month highs.

Most chip stocks, such as Micron Technology, Qualcomm and Broadcom, dropped by between 1.6 per cent and 3.3 per cent, sending the Philadelphia SE Semiconductor index down 1.1 per cent.

Among top movers, JetBlue Airways jumped 15 per cent after activist investor Carl Icahn disclosed that he holds a 9.91 per cent stake, adding that the carrier’s stock is undervalued.

Arista Networks shed 4.3 per cent after the cloud solutions provider forecast current-quarter adjusted gross margin below expectations, while Marriott International lost 5.8 per cent after the hotel operator forecast annual profit below Street expectations. – Additional reporting: Agencies

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter

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