Markets

European stocks fall after downbeat forecasts from chip companies

FTSE 250 edges higher as investors conclude Labour government’s first budget is less punitive on businesses than previously feared

Rachel Reeves, UK chancellor of the exchequer: first budget was seen as less punitive on business than had been expected. Photograph: Hollie Adams/Bloomberg
Rachel Reeves, UK chancellor of the exchequer: first budget was seen as less punitive on business than had been expected. Photograph: Hollie Adams/Bloomberg
Laura Slattery
Wed Oct 30 2024 - 18:19

Europe’s main stock index fell 1 per cent to its lowest in over a month on Wednesday, as technology stocks led a broader market decline in the aftermath of disappointing corporate earnings and some key economic data.

Benchmark indices on the big regional bourses including those of Germany, France, Spain and Italy dropped 0.7 per cent to 1.2 per cent.

Dublin

The Iseq slid 0.8 per cent in line with the weak performance across most European markets. Bank of Ireland was the key faller, declining 2.8 per cent to €8.49 despite issuing a solid trading update. Investors were concerned about its interest income in 2025 as the ECB cuts rates and potential costs stemming from an ongoing regulatory investigation into the UK car finance industry.

AIB ended 1.3 per cent lower at €4.83. Kerry Group was also in the red, finishing down 1.2 per cent at €93.30, while Ryanair dropped 0.7 per cent to close at €17.56.

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Insulation-maker Kingspan Group was among the climbers, adding 0.6 per cent to finish at €80.80, while Cairn Homes rose 0.5 per cent to €2.19.

London

The FTSE 100 fell 0.7 per cent with the blue-chip index weighed down by pharma giants AstraZeneca and GSK. But mid-cap stocks got a lift notwithstanding a £40 billion (€48 billion) tax-raising package in the UK budget.

The domestically focused FTSE 250 rose 0.3 per cent as market players deemed the new Labour government’s first budget to be less punitive on businesses than many had previously feared.

Pub stocks enjoyed a lift after chancellor of the exchequer Rachel Reeves announced a cut to duties on alcoholic drinks in pubs, and extended England’s business rates relief for retail and hospitality. Marstons rose 3.4 per cent, while betting firm Entain jumped 8.6 per cent after taxes on the sector were left unchanged.

But AstraZeneca fell 2.8 per cent after the pharma giant said its China president is under investigation and is co-operating with Chinese authorities. GSK dropped 3 per cent after it warned that its vaccine sales would fall this year, after weaker-than-expected sales for its respiratory syncytial virus (RSV) and shingles vaccines in the third quarter.

Spirits maker Diageo fell 2.6 per cent after its Italian peer Campari tumbled.

Europe

The pan-European Stoxx 600 closed 1.3 per cent lower, having hit its lowest level since mid-September during the day, and is on track for its worst monthly performance in a year.

The tech sector, which includes chipmakers, fell over 2 per cent, with analysts noting negative sector-wide implications from downbeat forecasts by Belgium’s largest semiconductor-supplier Melexis and two US chip companies.

Shares in French IT consulting group Capgemini fell 6 per cent after it cut its 2024 revenue forecast for the second time this year.

UBS Group’s shares dropped 4.5 per cent as investors focused on uncertainty about regulatory changes, the broader outlook and how much spare capital the bank would have going into next year.

Campari slumped 19 per cent after the Italian spirits group significantly missed third-quarter earnings expectations.

New York

Wall Street stocks advanced in the first hours of trading, with the tech-heavy Nasdaq rising to a record high as investors assessed corporate earnings as well as data showing the economy maintained a steady pace of growth in the third quarter.

Google parent Alphabet soared 5.4 per cent after it beat expectations for third-quarter revenue and profit on the strength of its cloud business and YouTube ad sales. Microsoft and Meta Platforms rose 1.1 per cent each, with both companies scheduled to report after the closing bell.

Chip stocks tumbled, weighed by dour forecasts from Advanced Micro Devices and Qorvo, which lost 9.6 per cent and 27 per cent respectively. Eli Lilly lost 6.6 per cent after missing sales estimates for its popular weight-loss and diabetes drugs. – Additional reporting: Reuters

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Laura Slattery

Laura Slattery

Laura Slattery is an Irish Times journalist writing about media, advertising and other business topics

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