Tuesday saw global shares hovering around their highest point in a month. This was largely due to the anticipation that the US Federal Reserve might give more indications of impending interest rate cuts, assuaging fears of a potential recession.
In Dublin, the Euronext had a slightly weaker performance compared to its international counterparts, ending the day with a 0.8 per cent decrease. Certain energy stocks experienced a downward trend, which had an impact on Irish housebuilders. Cairn Homes and Glenveagh Properties experienced losses of 1 per cent and 0.5 per cent respectively.
Simultaneously, Kingspan, an insulation specialist, fell by 50 basis points, alongside Grafton Group, the parent company of Woodies DIY, which dipped by 80 basis points. In the financial sector, both AIB and Bank of Ireland experienced losses, decreasing by 1.5 per cent and 1.3 per cent respectively.
However, it wasn’t all gloomy – sandwich producer Greencore piqued the interest of several investors, rising by 80 basis points. Conversely, another food company, Glanbia, fell by 80 basis points, continuing a downward drift triggered by interim results last week, revealing reduced revenue and profits for the year’s first half.
In the UK, the FTSE 100 experienced a 1 per cent drop, largely influenced by substantial losses of constituent companies like BT, Shell, and BP. BT shares plummeted by 6.4 per cent due to an announcement by Sky of a new broadband deal with CityFibre, a significant competitor to BT. This arrangement will allow CityFibre to offer broadband services on Sky’s network from next year, a considerable blow to BT who presently powers Sky customers through its Openreach network.
Interestingly, Ryanair did not register any significant change; however, it trailed behind European competitor EasyJet, which saw a 1.2 per cent rise. Giants in the energy sector, BP and Shell, appeared to be impacted by a decrease in oil prices, declining 2.76 per cent and 2.84 per cent respectively. Danni Hewson, AJ Bell’s financial analysis head, commented on how the FTSE 100 was weighed down by the heavy hit oil stocks.
In her comments, she noted that hopes for a ceasefire in the Gaza Strip, together with worries about Chinese demand, served as a driving factor for the plummeting oil prices. This fall, the lowest it’s been since early August, has put significant pressure on BP and Shell, both major players in the Index.
Europe
In Europe, the Euro Stoxx 600 saw a reduction of 0.5 per cent, however, it managed to recoup the majority of its losses after a disappointing US employment report raised cautious concerns about the economic health. Simultaneously, the Dax index in Frankfurt experienced a decline of 0.36 per cent, while in Paris, the Cac 40 closed with a slight drop of 0.25 per cent.
New York
At Wall Street, core indexes dwindled amid unstable trading activities. This is in anticipation of the upcoming symposium happening at Jackson Hole and last month’s Federal Reserve’s meeting minutes, which might provide some insights into a potential interest rate reduction in September. Seven of the eleven prominent sectors within S&P were trading at a deficit, with the energy sector being the most impacted, showing a decrease of 2.4 per cent. Chip stocks were also adversely affected, with the Philadelphia Semiconductor index experiencing an overall decline of 1.1 per cent.
Adding to the index, Eli Lilly saw an increase of 2.8 per cent in its value. The pharmaceutical company’s weight-loss drug succeeded in reducing the risk of type two diabetes by a staggering 94 per cent in pre-diabetic individuals who are overweight or obese, this benefit is achieveable with three years of weekly shots. Meanwhile, Palo Alto Networks saw a significant gain of 8.5 per cent, following their positive revenue and profit predictions for fiscal 2025.
However, on the negative side, Boeing saw a decrease of 5 per cent in its value when it halted testing flights for its 777-9 models as it awaits certification. Its decision came in the wake of an engine component failing to deliver as expected during a maintenance check. Furthermore, Lowe’s shares dropped nearly 1 per cent when the company slashed its annual profit and sales projections. This mirrors the concerns of their competitor, Home Depot, about the slim possibilities for a surge in demand for home improvement in the current year.