On Thursday, European stocks took a downturn, with car manufacturers being hit the hardest owing to ongoing concerns over the EU’s newly imposed tariffs on China’s imported electric vehicles. Additionally, shares from Italy lagged behind other European shares. Investors are also still processing the Federal Reserve’s prediction indicating fewer rate cuts in the US for this year.
In Dublin, the ISEQ couldn’t maintain its growth for two consecutive days, registering a drop of 1.35% which reflected the overall negative sentiment among investors in Europe. Leading this downward trend was budget airline Ryanair whose shares dipped nearly 2.7% to €16.99 amid a challenging day for the airline industry. Similarly, building materials firm Kingspan saw a decline of 2.6% in shares to €85.35. Irish banks also suffered losses, with AIB closing 1.1% lower at €4.86 and Bank of Ireland marking a 1.1% decline at €9.80. Some positivity was brought by packaging entity Smurfit Kappa that enjoyed an increase of 0.7% closing at €42.32.
In London, British stocks followed the downward trend of their European counterparts with the FTSE 100 closing 0.6% lower, just a day following its most profitable day in over a month. The FTSE 250 experienced its worst day in almost two months, plummeting 1.5%. Homebuilders and household goods took a significant hit as Crest Nicholson fell 11.6%, cautioning a likely one-third drop in its annual profit alongside an 88% decrease in half-year earnings. On a brighter note, technology firm Halma’s shares surged 13.4% to lead the FTSE 100 upon exceeding full-year revenue and core profit expectations. Fintech company Wise suffered an 11.5% fall in shares, even after tripling its profits over the past year, due to profit predictions falling short of investor expectations.
Across Europe, the Stoxx 600 closed down by 1.3%, with auto stocks dropping 2.4% triggered by worries about China’s possible reaction to the EU’s fresh tariffs on imported Chinese electric vehicles aimed at countering what the EU perceives as excessive subsidies from Beijing.
Beijing criticised the tariffs as being protectionist in nature and expressed hope that the EU would rectify its so-called “missteps” by navigating trade tensions via dialogue. Italy’s main stock index dropped a considerable 2.2 per cent following an increase in Italian loan interest rates to its highest point since the previous November. France’s Cac 40 also faced downward pressure, with nearly a 2 per cent drop, while European banks took a hit of 2.4 per cent.
The German national carrier, Lufthansa, saw a 5.5 per cent decrease in share value as JP Morgan analysts categorised it under a negative catalyst watch. In the US, the S&P 500 and Dow indexes experienced a dip as investors balanced bullish Federal Reserve predictions against figures indicating slowing inflation. However, the strength of semiconductor stocks sustained the Nasdaq, despite the US producer price index unexpectedly falling by 0.2 per cent in May, in contrast to economists’ prediction of a 0.1 per cent increase.
Broadcom, a substantial component of the Nasdaq, surged an impressive 12.2 per cent to a record peak after the chipmaker upped revenue projections from semiconductors used in artificial intelligence (AI) technology. The firm also disclosed a 10-for-1 forward stock split. Nvidia, a leader in AI chips, climbed 2.8 per cent, thereby driving the Philadelphia SE Semiconductor Index up by 1 per cent to a historic maximum.
Tesla stocks inched 3.8 per cent upward when it was announced that shareholders were voting for Elon Musk’s $56 billion (€52bn) remuneration package and the moving of the electric vehicle maker’s legal premises to Texas. Despite Apple surpassing Microsoft as the most valued company globally earlier in the week, its stocks remained unchanged. Meanwhile, Virgin Galactic sustained a substantial 14.7 per cent drop following the announcement of a 1-for-20 reverse stock split. This report includes additional data from Reuters.