European equities registered a minor uptick at the end of Monday’s trading, and public debt interest rates went down, due to suggestions of imminent rate reductions from the European Central Bank (ECB). However, market movement was somewhat muted owing to UK and US markets being closed for bank holidays.
Ireland
The share index of Ireland saw a marginal decline on Monday owing to the poor performance of banking and influential travel shares. The Euronext Dublin ended the session just below half per cent down at 10,024.75.
The day started at a promising note with the index hitting 10,081.29 shortly after 9am, but it failed to sustain the gains.
Shares of banks performed poorly, AIB ended at €5.14, recording a 1.25 per cent fall. Bank of Ireland closed at €10.39, showing a 1.7 per cent drop, while PTSB fell to €1.52, a 0.33 per cent slip. FBD holdings also suffered a 4 per cent depreciation.
The drop came amidst senior ECB policymakers ratifying the fact that the bank has the scope for interest rate cuts as inflation decelerates. The bank, however, was advised to move gradually in implementing a loose policy, despite the direction being discernible.
Ryanair and Smurfit Kappa were amongst other shares that underperformed on the trading day, declining 0.14 per cent and 1.25 per cent respectively.
Among the few in the green, food group Glanbia and insulation expert Kingspan gained 0.16 per cent and 0.55 per cent respectively, with the latter closing at €91.45.
Europe
The pan-European Stoxx 600 index finished 0.3 per cent up, approaching its record high achieved earlier this month.
Interest on public debt relaxed across Europe, with the yield on the top 10-year bund finishing at 2.547 per cent.
Disregarding a few, most sectors of the major Stoxx 600 ended in the green. The utility sector spearheaded the gains notching up a 1.1 per cent increase, while the auto sector also contributed by surging around 1 per cent.
On the other hand, a survey revealed a disappointing stagnation in German business confidence in May, undershooting the anticipated growth. Despite this, Germany’s prime stock index closed 0.4 per cent up.
Reworded Text: Alstom, the French train manufacturing company, saw a surge of 5.6% in its individual stock after it laid out the conditions of a proposed €1 billion right issue, an attempt to improve its financial standing. On the other hand, P/F Bakkafrost, a salmon farming business, saw its shares drop 2.5% when the ISA virus was detected in two pens at A-19 Vágur farming site.
This week, focus will be on the May consumer price index for the euro zone, to be announced on Friday. Throughout the week, individual inflation data from Spain, Germany, and France will also be revealed.
Notably, the European Central Bank seems all set to start reducing interest rates in their subsequent meeting next week. LSEG data indicates that there’s over a 90% likelihood of a rate decrease.
Investors will also keep an eye on US inflation data, expected to drop on Friday, which could offer insights on the Federal Reserve’s potential rate reductions this year.
Stock markets in the United Kingdom and the United States were closed due to public holidays.