Business

Tesla leads US megacap rally as European shares falter

Iseq index sheds more than 1% as Ryanair falls

Tesla led a rally in US megacap stocks after Elon Musk promised to roll out cheaper vehicles. Photograph: PA

Ian Curran
Wed Apr 24 2024 - 18:02

European shares slipped on Wednesday as traders weighed another big batch of corporate earnings.

In the United States, Tesla led a megacap rally despite reporting lacklustre results on Tuesday.

Dublin

The Iseq index fell by more than 1 per cent on Wednesday, underperforming its European peers.

Ryanair was “an outlier” across aviation during the session, traders in Dublin said, shedding 1.9 per cent to close at €20.50. It and other airlines were dragged lower following an update on Tuesday from US peer JetBlue, which reported a $716 million first-quarter loss due to “significant elevated capacity” in Latin America and on domestic routes.

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Ires Reit fell a further 2.2 per cent to below €1 per share after a recent rally in the stock.

Kerry Group, meanwhile, was off by more than 1 per cent at €79.45 per share while Smurfit Kappa lost close to 0.9 per cent to close at €40.03 per share in advance of its annual general meeting on Friday. Smurfit’s US rival and once would be suitor International Paper meanwhile reports first-quarter earnings on Thursday.

London

Despite an early surge and another strong session for industrial and precious metal miners, the blue-chip FTSE 100 index was flat on the session while the mid-cap FTSE 240 shed 0.5 per cent.

Shares of mining giants such as Rio Tinto, Antofagasta and Glencore rose between 1.7 per cent and 3.4 per cent as prices of most metals climbed on the back of a weaker US dollar.

On the flipside, Burberry fell 2.6 per cent after French rival Kering flagged a 40 to 45 per cent plunge in profit in the first half of this year. Other fashion names including JD Sports, down 3 per cent, lost ground while retailer Marks & Spencer slipped by almost 2 per cent.

Lloyds Banking initially dipped 1.1 per cent after the country’s largest mortgage lender reported a 28 per cent slump in quarterly pretax profit as rising costs, peaking interest rates and intensifying competition in the mortgage market hurt income. It recovered to add 0.8 per cent on the session at the close. NatWest was essentially unchanged while Barclays and HSBC both fell 0.6 per cent.

Europe

A rally in European stocks faltered as disappointing earnings in the banking and luxury sectors offset further gains for technology stocks. The pan-European Stoxx 600 was down 0.5 per cent while the blue-chip Stoxx 50 index shed 0.4 per cent, dragged down by luxury names like Kering.

A 6.8 per cent drop on the session saw the Gucci and Balenciaga owner fall to the bottom of the Stoxx 50 after a soft earnings report on Tuesday revealed a 10 per cent decline in first quarter sales amid sluggish Chinese demand. Ray-Bans owner EssilorLuxottica and Hermès, meanwhile, were essentially flat on the session with Luis Vuitton owner LVMH marginally in green for the session.

The tech sector climbed more than 2 per cent, with Dutch chipmaker ASM International surging after orders beat expectations. Banks weighed on the index, with Lloyds of London falling after missing estimates for lending income. Italian lender Intesa Sanpaolo with its Spanish counterpart Santander among the only upward movers across the sector, adding 0.7 per cent.

New York

An after-hours surge in shares of electric vehicle maker Tesla, following its promise of new models, and upbeat earnings from some US companies lifted sentiment on Wall Street. By closing bell in Dublin, the Dow Jones Industrial Average and the S&P 500 were flat but the tech-heavy Nasdaq Composite had gained 79.54 points, or 0.51 per cent.

Despite Tuesday’s abysmal results, Tesla led gains in megacaps as chief executive Elon Musk vowed to launch less-expensive vehicles.

Chipmakers also caught a bid on a bullish forecast from Texas Instruments.

Meta Platforms was due to report results later on Wednesday, and Wall Street will be focused on whether the social-media giant will give any signs of returns from the hefty spending on artificial intelligence. – Additional reporting: Reuters, Bloomberg

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times

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