Stock markets muted as investors weigh Powell comments

European shares were muted on Wednesday as better-than-expected employment data from the US fanned worries over Federal Reserve chairman Jerome Powell’s hawkish rhetoric on interest rates, while investors also assessed the euro zone’s fourth-quarter growth numbers.

Basic resources and technology stocks were the top gainers, while real estate bore the brunt of selling pressure amid a more general sense that Tuesday’s selloffs after Powell’s comments were overdone.

Dublin

The Iseq slipped 0.2 per cent for its first fall of the week as key stocks Bank of Ireland and Flutter Entertainment came under pressure. Paddy Power-owner Flutter finished 1.2 per cent lower at €157.75, while Bank of Ireland dropped almost 2 per cent to €10.48, with AIB closing 2.6 per cent lower at €4.01.

There were better fortunes for building materials groups CRH, which added 0.2 per cent to €48.74, and Kingspan, which rose 2.6 per cent to €65.82, while packaging giant Smurfit Kappa climbed 1.4 per cent to €36.09.

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But Ryanair was also among the fallers on a moribund day, declining 0.2 per cent to €15.37.

London

The blue-chip FTSE 100 nudged up 0.1 per cent as investors parsed Powell’s remarks, while insurer Hiscox rose on better-than-expected full-year results. The mid-cap FTSE 250 fell 0.5 per cent.

Hiscox jumped 5.2 per cent following a rise in underwriting profit despite posting a 76.5 per cent plunge in full-year profit. Some other insurers, however, fell following downbeat results. Admiral Group slid 4.1 per cent after the firm cut its full-year dividend and its annual profit missed estimates. Legal & General Group fell 1.6 per cent after operating profit at its asset management division declined 19 per cent in 2022.

The FTSE 350 non-life insurance sector was down 0.3 per cent. Quilter rose 3.3 per cent, after the fund manager’s net-inflows rose on an annual basis.

Restaurant Group slumped 15.4 per cent after the Wagamama-owner said it would slash the number of Frankie & Benny’s and Chiquito restaurants by about 30 per cent.

Europe

The pan-European STOXX 600 index managed to close 0.1 per cent higher, after hitting its lowest level in a week earlier in the session, on a day when the European statistics agency said the euro zone failed to register any growth quarter-on-quarter in the final three months of 2022, while slightly revising down both its GDP and employment growth numbers.

Meanwhile, European Central Bank governing council member Ignazio Visco criticised some fellow policymakers for recent comments on future interest rates that diverged from what had been agreed at the central bank’s meetings. The ECB is scheduled to hold its monetary policy meeting next week.

Andritz gained 6.8 per cent after the Austrian engineering group reported better-than-expected full-year results.

Germany’s DAX index outperformed its peers after a 7.6 per cent jump in Continental’s shares after the auto supplier forecast higher margins this year.

Thales fell 3.6 per cent after the French defence electronics company projected 2023 free-cash-flow below estimates.

New York

The S&P 500 edged up on Wednesday after Powell did not commit to a 50 basis point rate hike in March, although strong labour market readings supported views that the US central bank will stick to its hawkish policy for longer.

Growth stocks such as Apple and Nvidia gained as US Treasury yields fell, with the two-year easing slightly from its highest level in nearly 16 years.

Tesla slid 3.3 per cent after the US auto safety regulator said it was opening a preliminary investigation into 120,000 Model Y 2023 vehicles following reports about steering wheels falling off while driving.

Occidental Petroleum gained 1.2 per cent after Warren Buffett’s Berkshire Hathaway increased its stake in the oil company to about 22.2 per cent.

– Additional reporting: Reuters