European equities inched down on Thursday with banks leading declines after the Bank of England followed the US Federal Reserve and the Swiss National Bank in hiking rates amid worries of a banking contagion.
US stock indexes rallied following a turbulent session on Wednesday, when the Fed lifted its interest rate by a widely-expected 25 basis points but signalled that it is unlikely to climb much higher.
The Iseq index fell for a second consecutive session, declining almost 1.2 per cent as most of its biggest stocks slipped. As the broader European banking sector continued to be hit by weak sentiment Bank of Ireland dropped 3.8 per cent to €9.48, while AIB fell 3.4 per cent to €3.77.
Building materials group CRH declined 2.3 per cent to €45.72, while packaging group Smurfit Kappa ended 1.2 per cent lower at €33.08. Ryanair was also among the fallers, easing 0.9 per cent to €14.82.
Paddy Power-owner Flutter Entertainment was among the few major stocks to advance, with its stock finishing up 0.25 per cent at €160.95, while Glanbia posted a 1 per cent climb, closing at €13.59.
The UK’s exporter-heavy FTSE 100 index slid 0.9 per cent as the pound rallied against the dollar after the Bank of England raised interest rates as expected. The Bank of England announced a further quarter of a percentage point rise and said it anticipated the surge in UK inflation to cool faster than before despite a surprise jump in consumer prices on Wednesday.
The mid-cap FTSE 350 was 0.15 per cent weaker. Bank stocks fell 2.4 per cent, snapping two straight days of gains, while energy stocks dropped 1.6 per cent.
Among individual stocks British American Tobacco was a heavy faller, declining 5.5 per cent.
Informa fell 2.7 per cent after analysts at Morgan Stanley cut its rating on the events organiser’s stock to “equal-weight,” the equivalent of a hold, from “overweight,” the equivalent of a buy recommendation.
The continentwide STOXX 600 index slipped 0.2 per cent after closing at its highest level in more than a week on Wednesday.
European banks fell 2.4 per cent after a tentative rebound earlier this week when UBS Group agreed to buy embattled Swiss lender Credit Suisse in a €3 billion rescue deal. Citigroup downgraded the sector, warning the rapid pace of interest rate hikes would further weigh on economic activity and lenders’ profits.
Sanofi rose 5.5 per cent after the French drugmaker said its asthma and eczema drug Dupixent, jointly developed with Regeneron, met all targets in a trial to treat “smoker’s lung”.
Dutch tech investor Prosus climbed 6.4 per cent after Chinese video-game company Tencent said it would restrict its focus to its core business, while maintaining cost-cutting and improving efficiencies.
Sweden-based bank Svenska Handelsbanken fell 11.1 per cent after trading ex-dividend.
The Nasdaq led the rally among Wall Street’s main indexes as major rate-sensitive technology and growth stocks advanced after the Federal Reserve hinted it was close to pausing interest rate hikes amid turbulence in the banking sector.
As US Treasury yields slipped on growing hopes of an end to the Fed’s tightening cycle, Apple, Microsoft and Amazon gained around 2 per cent each. Nvidia Corp jumped 3.3 per cent after analysts at Needham raised their price target on the chipmaker.
Meanwhile, troubled regional lender First Republic Bank dropped 6 per cent and extended losses amid volatile trading following treasury secretary Janet Yellen’s remark that there was no discussion on insuring all bank deposits.
Block tanked 12.8 per cent after Hindenburg Research said it held short positions in the Jack Dorsey-led payments firm.
Coinbase Global slid 11.1 per cent after the US Securities and Exchange Commission threatened to sue the crypto exchange over some of its products.
Accenture jumped 7.7 per cent on plans to cut about 2.5 per cent of its workforce.
Additional reporting: Reuters