European shares experienced a decline on Friday, following a rally in the earlier session fuelled by the considerable interest rate cut from the US Federal Reserve. An unfavourable outcome from the obesity tablet trials led to a slump in Novo Nordisk.
In Dublin, the weekly closing of the Irish share index showed a marginal dip. While an upward intensity was exhibited by the financial shares, it was balanced out by a downturn in the food sector shares in the Dublin market. The Euronext Dublin logged off at 9967, marking a 0.3 per cent decrease for the day. Bank of Ireland and AIB posted gains of 1.5 per cent and 0.6 per cent respectively, at the close. Permanent TSB saw a 2.1 per cent increase. Conversely, there were downward movements in Glanbia and Kerry Group, with losses of 2.73 per cent and 1 per cent respectively. Ryanair followed suit, falling 0.9 per cent to conclude the week at €16.52. Dalata Hotel Group too closed lower by 0.96 per cent.
In London, trade concluded with the FTSE 100 down by 1.2 per cent on Friday, denoting a weekly slump. Consumer spending data, which surpassed expectations, coupled with a surge in the value of the British pound burdened export-oriented entities. Burberry lost ground by 3.5 per cent following Jefferies downgrading its rating to underperform from neutral, blaming ongoing struggles in the upscale merchandise sector. Further adding to the woes of the personal goods index, Dr Martens plunged over 19 per cent after a block trade was marked at 57.85 pence per share, a decrease from its earlier finish at 64.10 pence. Bridgepoint Group, a private investment firm, took an 11.4 per cent hit following news of a possible shareholder sale at a discounted price.
After reaching unprecedented highs of $2,600 (£1,966) for the first time, gold prices saw a boost of 0.2%, making precious metal miners the sole deviation. This escalation was propelled by the chances of further interest rate slashes in the US and Middle Eastern unrest. However, despite these predictions, UK stocks have fallen behind both euro zone and US counterparts this year. Such a downward trend occurs as both the European Central Bank and the Fed are predicted to accelerate the rate easing more rapidly than the Bank of England.
In the utility sector, Constellation Energy enjoyed a surge of over 14% in their share price, fuelled by Microsoft’s deal to restart a section of a decommissioned nuclear plant for powering AI projects. This outshone other performers in the market.
Across the continent, the all-inclusive pan-European STOXX 600 index finished lower by 1.4%, although it marked a positive two weeks of successive gains. All main European stock markets suffered significant declines, with Spain as the only exemption, recording a 0.2% decrease.
Furthermore, after underwhelming results from Phase 2a trials for an experimental obesity drug, monlunabant, Danish pharmaceutical company Novo Nordisk saw their stocks dwindle by 5.4%. Mercedes-Benz, in the automobile sector, saw a share price drop by 6.8% as it adjusted its profit margin for the full-year downward for the second time in under two months, leading to an overall sector decline of 3.6%. Similarly, other competitors in the industry like Volkswagen and France’s Forvia experienced drops of 3.4% and 8% individually.
The tone on Wall Street was more subdued following record highs from the prior session, while the dollar stabilized on the back of the market adjusting to the start of a rate-cutting cycle, initiated by a significant midweek reduction from the US Federal Reserve. With the decision now made, market participants have started to weigh the reasoning, with the Fed Chair, Jerome Powell, suggesting it’s a protective measure for the sturdy economy, rather than a reactionary move to weaker employment data. Despite initial losses, all three major US stock indexes are on track for weekly gains, largely due to the all-time highs achieved on Thursday, which encouraged investors towards riskier assets. The information above was additionally reported by Reuters.