Markets rocked as Fed warns it could switch back to bigger rate rises

A hawkish warning on Tuesday from Federal Reserve chairman Jerome Powell that the US central bank could speed up interest rate hikes upended recent thinking that inflation would be tamed with more modest measures and set the cat among the pigeons on Wall Street.

Dublin

Euronext Dublin remained largely out of the fray, outperforming international peers as it finished the day up 0.2 per cent.

Among the bigger hitters, Paddy Power Betfair parent Flutter Entertainment finished the day up 1.5 per cent, while building materials giant CRH was up 0.5 per cent.

Bank of Ireland finished the day up 2.5 per cent after it hiked its medium-term profitability target after reporting solid results for 2022. It also proposed an increase in cash returns to shareholders through dividends and stock buy-backs.

We must do more to welcome Irish people returning home

---

Buyers of older homes may pay thousands more per year in mortgage repayments

---

Family affairs: How Ireland’s newly rich are putting money to work in secretive firms

---

How to organise a work day out that doesn’t induce groans among staff

---

“They’ve had a fantastic run over the past while, and the numbers were well received,” noted a trader. “Volumes were fairly light across the board, so that one stood out.” Also among the banks, AIB was up about 1 per cent ahead of results on Wednesday.

Elsewhere, Dalata – the biggest hotel operator in the State – finished the day up 2 per cent, while budget airline Ryanair was down 1.5 per cent at close of business after trading flat or slightly up for most of the day.

London

The FTSE 100 trod water as sterling hit its lowest point against the dollar in two months.

The index of London’s top companies ended the day down 0.1 per cent. It came as steep falls for some of the country’s miners – including Fresnillo, which dropped 6.8 per cent – were offset by some of the biggest financial institutions.

In company news, Greggs shares dipped 1.4 per cent despite the high-street baker chain posting higher sales and confirming plans to open a raft of new sites.

Elsewhere, Wood Group gained again as the engineering business received a fourth takeover offer from private-equity firm Apollo. Wood told investors it may reject the roughly £1.6 billion (€1.8 billion) takeover move, helping its shares lift 12.8 per cent.

Estate agency group Foxtons closed higher after it cashed in on soaring rental prices, although the firm cautioned over a more challenging year ahead as higher interest rates are set to rein in housing sales. It was up 2.2 per cent at the end of Tuesday’s session.

Online fashion firm In The Style saw its calamitous stock market listing brought an end on Tuesday after agreeing to a £1.2 million sale to avoid insolvency. The retailer saw shares dive 78.6 per cent after the sale.

The biggest risers in the FTSE 100 were Melrose Industries, up 6.05p at 162.95p; Ashtead Group, up 128p at 5,874p; Beazley, up 12.5p at 623p; Flutter Entertainment, up 275p at 14,250p; and Rentokil, up 8.6p at 520p.

The biggest fallers were Fresnillo, down 52p at 708.4p; Ocado Group, down 24.8p at 505p; Glencore, down 23p at 479.5p; Endeavour Mining, down 58p at 1,685p; and Antofagasta, down 47.5p at 1,591p.

Europe

European shares extended their losses after Powell’s prepared remarks. The pan-European Stoxx 600 index lost 0.6 per cent and MSCI’s gauge of stocks across the globe shed 0.72 per cent.

In Germany the Dax index closed down 0.6 per cent, while in Paris the Cac 40 dropped 0.5 per cent.

New York

US stocks retreated and benchmark Treasury yields wavered after Powell commenced his semi-annual, two-day monetary policy testimony before Congress.

All three major US stock indexes were languid in early trading before Powell’s remarks were released as he sat down to testify before the Senate banking committee.

But they headed sharply lower and Treasury yields reversed an early dip after Powell struck a more hawkish tone than investors expected, stoking speculation the central bank could raise interest rates higher – and keep them there longer – than market participants might have anticipated.

The Dow Jones Industrial Average fell 0.54 per cent; the S&P 500 lost 0.61 per cent; and the Nasdaq Composite dropped 0.39 per cent. – Additional reporting: agencies