Shares in Europe experienced an early uplift that was later negated, resulting in a decrease in value at the close of trading on Friday. The primary reason for this decrease was a fall in the value of L’Oreal shares. Political uncertainty in France also negatively influenced the benchmark index throughout the week, month and quarter.
In Dublin, the index of shares reduced by 0.5% to reach 9,318 at the end of the week. Banking stocks showed mixed results where shares of Permanent TSB fell almost 3% and the Government announced it would market an additional 5% of AIB shares, reducing its stake to approximately 25%. A slight rise of nearly 1% was reported by the Bank of Ireland. Other sectors like food and travel also experienced a decrease, with Ryanair and Glanbia both seeing a reduction, while Irish Continental Group’s shares fell by 3.5%.
London’s main stock market index, the FTSE 100, ended the week slightly down as well, even though the UK’s economic growth estimates were revised to indicate a healthier outlook. As trading came to a close, the index had dropped by 15.56 points or 0.19%, to settle at 8,164.12. Retailers, including JD Sports, Marks & Spencer and Burberry, were badly hit, with the former dropping by more than 5.4% following a surprise revenue decline forecast by Nike for 2025.
Shares in MusicMagpie and bar operator Nightcap also took a hit. The technology reseller’s shares fell by approximately 20% due to a pre-tax loss of £3 million for the initial half of the year, and a reduction in revenue compared to the prior year. Meanwhile, Nightcap’s shares fell by half following a warning of lower earnings and plans to delist from the London Stock Exchange.
Lastly, the broader European STOXX 600 extended its losses for the fourth consecutive session, closing 0.2% lower. The downturn is a direct result of ongoing political turbulence across the region.
In the personal and household goods sector, a one per cent decline was seen, driven by a three per cent drop in L’Oreal. The French cosmetics powerhouse saw its shares go down after their CEO predicted a smaller than expected market growth during a discussion held by JP Morgan.
In the meantime, the STOXX 600 reported its first decrease in quarterly earnings after three periods of growth. This occurred amid political turmoil in France due to President Emmanuel Macron’s sudden call for an early election earlier in the month. This event caused the benchmark French index, CAC 40 to fall by 0.7% – an 8.8% slump for the quarter, which was a lacklustre performance as compared to other regional exchanges. Subsequently, the risk premium recorded on French government bonds marked its peak since 2012.
In stock news, the Finnish company Nokia experienced a 1.5% increase after they moved to purchase Infinera in a transaction worth $2.3 billion. Meanwhile, Franco-Dutch airline company Air France-KLM saw a 4.1% dip to a record low, following Barclays’ decision to downgrade the company from “overweight” to “equal-weight”, primarily due to the political instability in France.
In New York, stock traders drove shares towards new all-time highs as reduced inflation figures bolstered predictions of the Federal Reserve commencing rate cuts within the year. The technology sector boosted a further surge in this year’s equities, contributing to the S&P 500 index hitting 5,500. Additionally, the Nasdaq 100 briefly crossed the historic 20,000 mark, headed towards achieving its best monthly performance since November. However, treasury bonds lost momentum following initial a rise in response to the data release. Market forecasters expect nearly two rate cuts this year, with a decrease of a quarter point fully anticipated by November.
Lastly, Nvidia, a company which has experienced large swings in share price, led the gains in the mega-cap sector, whereas Nike experienced a significant fall of almost 20% due to a pessimistic performance projection. At 11.30am New York time, an increase of 0.3% was registered in both the S&P 500 and the Nasdaq 100.