On Thursday, European shares took a dip as market players traded cautiously ahead of crucial inflation figures and semiconductor stocks witnessed a drop. Concerns about inflation made a comeback following an unexpected acceleration in consumer price increases in both Canada and Australia.
In contrast, US treasury yields saw a minor reduction in response to various economic surveys that largely indicated waning economic momentum, aligning with the belief that the US Federal Reserve might soon start slashing interest rates.
In Ireland, mirroring the slump on Wednesday, the Iseq All-Share index fell by 0.8% on Thursday, dragging down Irish banking stocks. AIB shares slumped 1.8% to €4.95 each following the government’s decision to sell a further 5% chunk of AIB shares, thus reducing its stake to near 25%. Simultaneously, the Bank of Ireland shares took a hit and fell 2.7% to €9.67 each.
Shares of the paper packaging firm, Smurfit Kappa, also dropped slightly by 0.7% to €41.49, despite acquiring US regulatory clearance for its merger with competitor WestRock. This over $25 billion deal needs the green light from the Irish High Court, which is expected to hear the case on Tuesday.
On the other hand, shares in the property sector exhibited mixed performance with Cairn Homes leading and Glenveagh trailing. Meanwhile, Ryanair shares also dipped by 0.6% to €16.42.
In London, FTSE 100 and FTSE 250 demonstrated a diverging trend. While the FTSE 100 index fell 0.5%, the mid-cap FTSE 250 rose by 0.2%. Among the individual stocks, accessories brand Burberry was the most affected, collapsing by 6.4% as it traded without entitlement to its most recent dividend yields. This was a consequence of Deutsche Bank Analysts slashing the company’s sales expectations due to weaker data from China and the US.
Pharmaceutical stocks also suffered. AstraZeneca shares slipped 1.8%, and GSK was down 4.6% after the US regulators withheld the recommendation on GSK’s respiratory vaccines for adults under 60.
IAG, the parent company of Aer Lingus, witnessed a 1.8% drop following the unsuccessful negotiations between its pilots and executive team. In European trading, the renowned Stoxx 50 index dipped by 0.3%, while the broader Stoxx 600 descended by 0.4%. Concerns over inflation filmed up again due to unexpected spikes in economic data from Australia on Wednesday and Canada on Tuesday. The measures saw French shares suffer most dramatically in anticipation of the Sunday’s legislative elections’ first round in France. Notably, losses were sustained by L’Oreal that declined by 3.4% and Pernod Ricard, administering Jameson, plummeting over 2%. Other French luxury powerhouses such as LVMH and EssilorLuxottica also recorded a downturn. In an opposite trend, Kering, Gucci’s proprietor, reaped over 5% enhancement after the Bank of United States lifted the stock’s score to buy.
Over in New York, Wall Street’s primary equity indices held their positions on Thursday as market participants looked forward to personal consumption spending data from the US on Friday, this data being the preferred measure of inflation for the Federal Reserve. A slump in semiconductor stocks also played its part in influencing a subdued environment, with Micron Technology’s shares dropping 6% after a less than inspiring revenue forecast issued late Wednesday. The trend continued with Nvidia experiencing a 2.3% loss. However, large-scale tech stocks such as Alphabet, Microsoft and Meta Platforms observed an increase between 0.6% and 1%. Amazon capped off the day with a 1.2% surge, having reached a market capitalisation of $2 trillion (€186 trillion) for the first time on Wednesday. Other significant moves included Walgreens Boots Alliance dropping a mammoth 24.6% having trimmed its 2024 earnings forecast and announcing strategic closures of several under-performing US outlets. Additionally, jeans manufacturer Levi Strauss suffered a 16% blow after failing to meet the revenue expectation for its second quarter. – Sources: Bloomberg, Reuters.