Share values retreat before advancing UK inflation

European shares slid on Wednesday and bond yields rallied after a sharp rise in UK inflation brought the spotlight back to more monetary tightening amid data which showed euro zone economic growth was slightly less robust in the second quarter.

In the US, Wall Street’s main indexes also fell as growth stocks came under pressure after bond yields climbed in advance of minutes from the Federal Reserve’s July meeting.

DUBLIN

The Iseq index fell almost 1.3 per cent on a volatile day for most of its heavyweight stocks, especially those with a major focus on the UK.

Food group Glanbia bucked the trend, however, surging by 7.3 per cent to €12.48 per share. The company posted better than expected results for the first half of the year, with revenues ahead by 38 per cent.

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What is the potential economic cost of a united Ireland? (From May 2021)

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Escalating inflation in the UK, which will crimp consumer spending power, affected Irish stocks operating there. Budget airline Ryanair dropped by 5.5 per cent to €12.60. Meanwhile, insulation supplier Kingspan fell 4.9 per cent to €59.54. The company is also exposed to the threat of an economic slowdown in the US.

LONDON

Stocks fell, with the FTSE 100 index snapping a three-day winning streak after data showed British consumer price inflation jumped to 10.1 per cent in July, raising bets about more aggressive interest rate hikes by the Bank of England. Markets are now pricing in an 85 per cent chance of a half percentage-point rate interest hike in September.

The blue-chip FTSE index ended 0.3 per cent lower, dragged down by declines in insurers and bank stocks.

Persimmon slid 7.8 per cent after the housebuilder posted a fall in half-yearly profit.

The domestically focused FTSE 250 midcap index closed 1.5 per cent lower, easing off two-month highs.

Infrastructure firm Balfour Beatty jumped 10.5 per cent after posting a 42 per cent rise in underlying operating profit in the first half and announcing a hike in dividend.

Cineworld plunged 60.4 per cent to a record low after the world’s second-largest cinema chain warned that admission levels at its theatres are likely to stay lower than expected until November due to limited film releases.

EUROPE

The pan-European Stoxx 600 shed 0.9 per cent, clocking its biggest one-day percentage fall in more than a month. The index also snapped a five-day winning streak.

In Germany, investors fretted over low water levels in the Rhine river. The river is Germany’s main commercial artery, which is now experiencing a block, with 20 ships stuck in traffic after a vessel’s engine failure closed part of the waterway. German stocks fell 2 per cent.

Uniper dropped 12.1 per cent after the German utility reported a first-half net loss of €12.3 billion, mainly due to lower Russian gas supplies.

Sanofi fell 5.7 per cent after the French healthcare company stopped further work on amcenestrant, a treatment once seen to have strong commercial potential in breast cancer, after a second trial failure.

Switzerland’s biggest life insurer Swiss Life rose 0.3 per cent after posting a 4 per cent rise in its half-yearly net profit.

Danish brewer Carlsberg jumped 3.9 per cent as it said it had not seen rising living costs affecting beer sales.

NEW YORK

Retail earnings have been mixed so far this week, with Target Corp falling 3.3 per cent after reporting a 90 per cent slump in quarterly earnings as its inflation-hit customers reined in spending on discretionary goods.

The S&P 500 retail sector declined 1.7 per cent, after jumping 1.9 per cent in the previous session on encouraging quarterly earnings from Walmart and Home Depot.

High-growth and technology stocks such as Amazon and Nvidia fell more than 2.5 per cent each as US Treasury yields rose for the second straight session.

Home improvement chain Lowe’s Cos rose 0.8 per cent on posting a better-than-expected quarterly profit. — Additional reporting: Reuters