European shares retreated from multi-month highs on Friday after a mixed bag of earnings and a surprise Bank of Japan policy tweak, but German blue-chips bucked the trend to close at a record high on signs of cooling inflation.
Rattling investor nerves, the Bank of Japan made its yield curve control policy more flexible and loosened its defence of a long-term interest rate cap, in moves seen as a prelude to an eventual shift away from the massive monetary stimulus.
Dublin
The Iseq index nudged down 0.1 per cent in line with the slightly subdued mood across European stock markets. AIB rose 3.7 per cent to €4.18 on a day when raised its full-year net interest income forecast and said its profitability will be “materially in excess” its target, after delivering a strong set of interim results.
There were few other significant gains, with most of the main stocks sliding fractionally into the red. Building materials giant CRH declined 0.3 per cent to €54.26, packaging group Smurfit Kappa fell 0.4 per cent to €36.22 and Ryanair slipped 0.25 per cent to €15.82.
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Glanbia fell 1.5 per cent to €14.13.
London
The FTSE 100 ended flat after a rally fizzled on worries of higher interest rates sparked by the Bank of Japan’s surprise tweak to its yield control policy, while AstraZeneca led gains in the pharmaceutical sector.
Pharma stocks jumped 1.8 per cent after AstraZeneca climbed 3.3 per cent as it beat quarterly profit expectations.
British Airways operator IAG, which also owns Aer Lingus, was the biggest gainer on the FTSE 100 index, up 6.6 per cent as its quarterly profit beat analyst forecasts by 40 per cent.
Rate-sensitive real estate stocks slipped 1.3 per cent as the UK 10-year gilt yield rose to its highest since July 18th earlier in the session.
Crisis-hit NatWest added 2.3 per cent after posting forecast-beating first-half profit as it reels from the abrupt departure of chief executive Alison Rose over a public spat with former Brexit Party leader Nigel Farage.
The midcap FTSE 250 index snapped three straight days of gains to fall 0.8 per cent.
Europe
The pan-European Stoxx 600 index ended 0.2 per cent lower after closing at its highest level in nearly 1½ years on Thursday when the European Central Bank hiked interest rates as expected but raised the possibility of a pause in September.
Germany’s Dax index hit an intraday record and held on to most of the gains to close 0.39 per cent higher after data showed inflation resumed a downward trend in Europe’s largest economy. However, separate data showed the economy stagnated in the second quarter of 2023, missing forecasts for modest growth.
Hermès rose 3.9 per cent as sales at the Birkin bag maker accelerated in the second quarter. French drugmaker Sanofi slipped 2.9 per cent as quarterly sales fell short of estimates, and French IT consulting group Capgemini tumbled 7 per cent on a bigger-than-expected slowdown in second-quarter growth.
Pan-European stock and derivatives exchange Euronext, which owns the stock exchange in Dublin, climbed 7.4 per cent, boosted by the launch of a €200-million share buyback programme.
US
Wall Street rose on Friday after data suggesting an easing in inflation pressures added to hopes that the Federal Reserve’s policy tightening was ending, while chip stocks rose as Intel posted a surprise quarterly profit.
Intel’s results and forecast pointed to an improving PC market, sending the chipmaker’s shares up 6.8 per cent.
Procter & Gamble climbed 3.4 per cent after the consumer behemoth beat analysts’ estimates for quarterly sales, while Ford shed 4.2 per cent after chief executive Jim Farley outlined a change in the automaker’s product strategy, slowing the ramp-up of money-losing electric vehicles. – Additional reporting: Reuters
