UK shares mixed on inflation worries and US debt ceiling gloom

London’s main indices extended losses on Thursday as investors weighed the prospect of more Bank of England rate hikes after Wednesday’s hotter-than-expected inflation data.

European and US indices, meanwhile, steadied, pulled higher by chipmakers and optimism over recent corporate earnings reports.

Dublin

Traders in Dublin said Irish shares largely “pressed pause” after large downward moves by some of the big names in the previous session.

The Iseq index was up by about 0.5 per cent, clawing back roughly half of Wednesday’s losses and outperforming its European peers.

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Paddy Power owner Flutter, off by more than 4.6 per cent on Wednesday, added 1 per cent to close out the day at €181.75. A strong performer throughout the week after posting near-record annual profits on Monday, Ryanair continued its run, up more than 1.2 per cent on the session to €16.75 per share.

AIB and Bank of Ireland were essentially flat on the session at €3.85 and €8.84 per share.

London-listed, Irish-headquartered drinks-maker C&C added about 6 per cent after trending lower in recent sessions despite publishing a positive set of annual results on Wednesday.

Moving in the opposite direction, home builders Cairn Homes and Glenveagh shed roughly 1 per cent to finish the session at €1.04 per cent while Kerry Group was off by 0.7 per cent at €93.78 per share.

London

London’s blue-chip FTSE 100 shed 0.74 per cent per cent, touching two-month lows in the session, while the mid-cap FTSE 250 index slipped by 0.48 per cent.

Concern over Wednesday’s gloomy UK inflation print lingered across certain subsectors with consumer brands like Coca Cola and tobacco makers Imperial Brands and British American Tobacco down by 2.7-4.8 per cent.

Cineworld, a bright spot in the early part of the session, finished Thursday down more than 8 per cent. Shares in the cinema operator had added as much as 4.7 per cent earlier in the day after announcing that it expects to emerge from bankruptcy protection in July after its restructuring proposal received the support of lenders.

Europe

European stocks steadied after their worst two-day sell-off since March with the blue-chip Stoxx 50 index gaining 0.2 per cent. The pan-European Stoxx 600, meanwhile, shed another 0.2 per cent, dragged lower by UK names after giving up 2.5 per cent in the previous two days. The German Dax and French Cac 40 indices were also down slightly.

Luxury brands have been in the firing line in recent days against the backdrop of a possible US debt default and how it might impact consumer demand in the world’s largest economy. In a mixed session, LVMH and Hermes, up by between 1 per cent and 2 per cent on the session, rallied while Italian-French Ray-Ban owner EssilorLuxxotica shed 0.6 per cent.

European chipmakers gained, meanwhile, after the world’s most valuable chipmaker, Nvidia Corp, forecast quarterly revenue more than 50 per cent above expectations.

Shares of Dutch-anchored BE Semiconductor jumped 7.8 per cent, while ASM rose 8.3 per cent and ASML added 5.4 per cent. Bank of America analysts see both ASM and ASML as beneficiaries of growing AI adoption.

New York

US shares were mixed and the dollar rallied to the highest since mid-March on Thursday after a top republican signalled some progress was made in debt ceiling negotiations. Representatives of US president Joe Biden and top congressional republican Kevin McCarthy held what both sides called productive talks on the debt ceiling. But with no resolution in sight, traders remained wary of a possible default in early June.

The S&P 500 gained 0.6 per cent while the Dow Jones Industrial Average gave up more than 0.4 per cent. The Nasdaq, meanwhile, added more than 1.7 per cent as chipmaking giant Nvidia delivered forecast-smashing revenue projections.

Shares in Nvidia climbed more than 25 per cent, inching it closer to a $1 trillion valuation after the company’s forecast related to AI demand surprised even the most optimistic analysts on Wall Street.

It is another sign that investors are willing to pile into promising tech stocks, despite the growing macro concerns. Shares in Tesla, Apple, Microsoft and Alphabet all added between 0.7 per cent and 3.4 per cent.