On Monday, a sharp drop in the technology sector impacted European stock markets negatively, as investors proceeded with caution in light of a crucial US inflation report due later this week, which could impact interest rate cut predictions.
In DUBLIN, the trading week commenced on a sour note, mirroring the trend seen across Europe, with the market closure seeing only minor losses. Shares in the banking sector showed a mixed trend as Bank of Ireland shares dropped by 0.5 per cent by closure, while AIB’s shares saw a rise by over 2 per cent. There were declines in the shares of construction firms, with insulation experts Kingspan experiencing a near 3 per cent decrease, and Cairn Homes closing the day at a lower rate. Ires Reit, the country’s largest private landlord, saw a minor fall of 0.4 per cent in share prices. Agri firm Origin Enterprises witnessed a 3 per cent decrease by market close.
Over in LONDON, the FTSE 100, the UK’s premier index, experienced marginal growth on Monday, thanks to a boost from non-life insurance stocks. The FTSE 100 saw a modest 0.1 per cent rise, whereas the FTSE 250 experienced a 0.4 per cent decline. Non-life insurance stocks led the gains, with a considerable 1.9 per cent increase. Admiral Group helped buoy the index, with their share prices experiencing a 4.9 per cent surge after Berenberg’s target price increased. Construction and materials stocks sustained a loss of 1.6 per cent following UBS’s downgrade of Breedon Group stock rating to ‘neutral’ from ‘buy’, and Morgan Stanley reducing its target price. The shares of Breedon fell by a significant 5.2 per cent. Other notable changes included Currys’ significant 5.4 per cent drop and Marks & Spencer yielding a 1.4 per cent increase. Vanquis Banking Group shares plummeted to a record low, decreasing by 50 per cent, after the company anticipated substantially reduced income in 2024 in comparison to market predictions.
In EUROPE, the pan-European STOXX 600 closed with moderate losses of 0.4 per cent, having hit a historic high in the previous trading session.
The tech sector was the leading negative influence on the STOXX 600, with a 2% drop caused mainly by BE Semiconductor’s shares falling by 8.9%. ASML, another significant chip producer, also saw a 4.2% decrease.
LEG, the German property business, witnessed a 5.1% surge in its shares after announcing favourable full-year results and a potential larger than anticipated dividend. Unfortunately, Telecom Italia’s shares fell by 4.6% because details about a venture’s cash flow and debt, which was formed by the intended sale of its fixed-line network, failed to impress investors who had also significantly sold off the previous week.
Italian local utility company A2A’s shares also dipped 3.6% after a $1.3 billion purchase agreement was signed to acquire some power distribution networks from Enel.
In the US, main stock indexes experienced a mild drop on Monday as investors prepared for crucial inflation data this week, which could provide insights into the US Federal Reserve’s monetary strategy, particularly after last week’s inconsistent employment data. By 15:16, Irish Time, the Dow Jones Industrial Average fell 137.47 points (0.36%) to 38.585.22; the S&P 500 lost 19.31 points (0.38%) to 5,104.38; and the NASDAQ Composite was 53.22 points (0.33%) down, setting at 16,031.89.
Meta Platforms led the losses among large tech firms with a 4% drop. Nvidia, popular for its AI capabilities, saw a 0.4% slide after experiencing a 5.5% drop on Friday. Other chip manufacturers like Advanced Micro Devices and Broadcom suffered nearly 3% each in losses, while the Philadelphia Semiconductor Index saw a 1.5% reduction.
Boeing also saw a 3.6% decrease in stock value after Alaska Airlines announced a criminal investigation in collaboration with the US Department of Justice into a Boeing 737 Max malfunction on one of their January flights.
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