On Friday, European stocks declined and finished the week lower due to concerns about persistent inflation in the US and the recovery of the euro zone’s economy, which could potentially disrupt anticipated rate cuts from central banks. Lower interest rates traditionally mean more affordable financing for businesses and customers, resulting in increased business and profit.
In Dublin, the Iseq index dipped by 0.5 percent, with the downward trend influenced by Ryanair’s decrease, which closed the week on a sour note. The airline’s stocks dropped by 3.6 percent, closing at €17.96 on Friday. Kerry group also experienced a drop of 0.6 percent, closing at €78.10. However, Smurfit Kappa and Kingspan saw an increase, recording a rise of 1 percent and 0.5 percent respectively.
London’s FTSE 100 fell by 0.3 percent marking the fourth consecutive day of decline, spurred by waning expectations of interest rate cuts globally and political uncertainty ahead of domestic general elections. Conversely, the FTSE 250 mid-cap index, which is more focused on the domestic market, rose by 0.7 percent, ending a three-day decline streak.
Across Europe, the pan-European Stoxx 600 index saw a slight dip of 0.1 percent, culminating in a nearly 0.4 percent decrease for the week. This was largely due to apprehensions from investors following warnings from European policymakers about monetary easing after June to avoid a surge in inflation.
After a survey indicated that euro zone business activity grew at its swiftest rate in a year in May, euro zone bond yields saw their largest weekly increase in a month. This growth is supplemented by separate data confirming the growth of Germany’s economy in the first quarter of 2024.
On the other hand, the Spanish energy and construction giant, Acciona, witnessed a 7.1% fall following a decrease in its predicted core earnings growth for this year based on current energy price forecasts.
The French auto manufacturer, Renault, experienced a 5.2% jump and was a top performer on the main index when it revealed plans for a share buyback. This upswing was helped by UBS upgrading the stock from “sell” to “neutral”.
In connection to the North Sea Troll gas field, the largest in Europe, Equinor and its partners intend to invest $1.13 billion (€1.04 billion) to enhance production further. This decision resulted in a 2.7% drop in the Norwegian energy firm’s shares.
Across the Atlantic, US stock indexes saw an uptick on Friday, offsetting some losses caused by renewed inflation worries stirring monetary policy nervousness ahead of a long weekend. The Nasdaq, predominantly tech-focused, increased over 1% and was poised to achieve its fifth consecutive weekly gain. Meanwhile, after a two-week low on Thursday, the Dow looked to be heading towards its first weekly decrease in five weeks.
There was a 0.6% increase in Nvidia shares, a day after they surged by over 9%, closing above the significant $1,000 benchmark and adding approximately $218 billion to its market capitalisation. Contrarily, Workday saw a 13.9% fall after the human resources software provider revised down its yearly subscription revenue forecast.
Finally, Ross Stores experienced a significant 9.8% rise following the release of first-quarter earnings that exceeded estimates, causing an uplifting of its yearly profit forecast.