European stocks closed flat on Monday, following a five-week winning streak, as declines from a surprise US credit rating downgrade were offset by upbeat corporate updates.
The pan-European Stoxx 600 index pared earlier declines to close 0.1 per cent higher, hovering around the seven-week intraday high it touched on Friday.
Credit rating agency Moody’s cut its ratings on US debt on Friday, citing concerns about the nation’s growing $36 trillion debt pile, which sent jitters across global markets earlier in the day.
“The downgrade reflects what markets already know: we’re in a new fiscal regime defined by austerity via tariffs and caps... Don’t overreact to the downgrade itself as history shows these calls often lag the fundamentals,” said Lale Akoner, global market analyst at eToro.
Dublin
Ryanair shares rose almost 5 per cent to €23.48 after the airline said fares would rise this summer after a year of lower fares saw the budget airline’s profits fall 16 per cent. Profit after tax slipped to €1.61 billion from €1.92 billion as passengers paid 7 per cent less on average than in 2024 for their flights. Passenger numbers climbed 9 per cent to a record 200 million, the company said.
Glanbia shares rose 2 per cent to €12.02 as investors push for a strategic review of the Kilkenny-headquartered food group. Both AIB and Bank of Ireland fell marginally in line with financials across Europe.
Europe
Travel and leisure stocks were the biggest gainers on European indices.
After Ryanair’s results, Lufthansa and EasyJet rose 2.6 per cent and 3.2 per cent, respectively.
BNP Paribas rose 3.4 per cent, one of the biggest boosts, after the French bank announced a share buyback plan worth €1.08 billion.
Some luxury stocks declined after China’s retail sales data for April missed expectations. Moncler dropped 2.2 pe cent, LVMH fell 1.1 per cent, while the broader index was down 1 per cent.
Volkswagen fell 5.2 per cent to the bottom of the STOXX 600 as it traded ex-dividend.
London
London stocks ended at a seven-week high on Monday as the UK struck a wide-ranging deal with the European Union in the most significant reset of ties since Brexit, while a Moody’s downgrade of US sovereign credit rating reverberated across global markets.
The blue-chip FTSE 100 rose 0.2 per cent, climbing for the third straight day. The index had shed as much as 0.8 per cent earlier in the session.
Nearly nine years after it voted to leave the bloc, Britain’s deal with the EU included a security and defence pact, fewer restrictions on British food exporters and visitors, and a contentious new fishing agreement.
The reset follows Trump’s upending of the post-war global order, which has forced governments around the world to rethink ties on trade, defence and security.
Among stocks, Diageo fell 1 per cent as the world’s largest spirits maker unveiled a plan to cut $500 million in costs and make substantial asset disposals by 2028, as it looks to turn around its performance and reduce debt.
New York
Wall Street’s main indexes slipped on Monday and Treasury yields spiked after Moody’s surprise downgrade of the US sovereign credit rating due to mounting debt sparked anxiety about the fiscal outlook.
Moody’s cut the US sovereign credit rating to “Aa1” from “Aaa” late on Friday due to concerns about its ballooning $36-trillion debt, becoming the last of the three major credit rating agencies to downgrade the country. It had first given the United States its pristine “Aaa” rating in 1919.
Worries about the ever-increasing US deficit were front and centre as President Donald Trump’s sweeping tax-cut bill - which Republican infighting over spending cuts had stalled for days - won approval from a key congressional committee on Sunday.
Six of the 11 S&P sub-sectors fell, with consumer discretionary and energy being the worst performers.
Most megacap and growth stocks recouped some of their losses around noon, though Tesla lagged with a 3.1 per cent fall. Highly valued tech stocks were pressured as rising rates tend to discount the present value of future profits. Chip stocks also sold off, with a gauge for semiconductor stocks losing 0.9 per cent.
Additional reporting by Reuters
