Shares in Europe slip as euro area inflation figures disappoint and Bank of England holds the line

European shares slipped on Thursday after new estimates indicated euro area inflation eased less than anticipated at the start of the year, testing expectations that the European Central Bank will begin lowering interest rates as soon as the spring.

The Bank of England, meanwhile, held rates steady, and said it will wait for stronger signals that inflation is declining before it begins cutting.

In the US shares treaded water in advance of a slew of earnings releases from mega-cap tech companies on Thursday evening.

DUBLIN

The Iseq All Share index lost 0.6 per cent, performing broadly in line with its European peers.

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Bank stocks bore the brunt of the selling, with AIB off by close to 2.5 per cent at €3.98 per share while Bank of Ireland slipped 2.3 per cent to €8.33 per share. Permanent TSB, meanwhile, closed at €1.65 per share, down more than 4 per cent, on relatively light volumes.

Embattled apartments owner Ires Reit shed more than 2.4 per cent to finish the session at €1.13. The Irish Times reported that tensions between the company’s board and its Canadian founder Capreit had been building for some time. The Toronto-based company will support a planned boardroom coup at the property group this month.

Smurfit Kappa closed down 2.5 per cent at €33.68 per share after its Finnish packaging rival Stora Enso unveiled plans to cut more jobs following its earnings slump in the fourth quarter.

Ryanair, meanwhile, was a rare bright spot on the Irish index. The airline continued to bask in the afterglow of its Monday results release, advancing by nearly 1.3 per cent to €19.56 per share.

EUROPE

The blue-chip Stoxx 50 index shed 0.5 per cent, while the cross-Continent Stoxx 600 slid 0.4 per cent.

A recent recovery in European bank stocks stalled after lacklustre results from a number of key players. Shares in French lender BNP Paribas slipped as much as 10 per cent after the bank pushed back a key profitability target and downgraded its outlook for the year. Dutch bank ING’s stock fell sharply as it forecast lower income for 2024.

Moving in the opposite direction, Deutsche Bank shares advanced 2.5 per cent after Germany’s biggest lender raised its revenue growth targets.

LONDON

After paring early gains the benchmark FTSE 100 and mid-cap FTSE 250 finished marginally lower on the session after the Bank of England held rates steady and said it wanted more evidence inflation would return to target before lowering rates.

Rates-sensitive banks suffered with Lloyds, Barclays and NatWest finishing the session off by between 0.5 per cent and 2.2 per cent.

Shell, meanwhile, climbed 2.4 per cent to a more than three-week high after the energy major increased its dividend by 4 per cent and extended its share repurchases following a better-than-expected fourth-quarter adjusted profit. BP advanced 0.3 per cent, with industrial miners Glencore and Antofagasta also ahead by between 0.6 per cent and 1 per cent. Rio Tinto shed 0.6 per cent.

Aer Lingus-owner IAG lost 1.3 per cent, while Paddy Power-owner Flutter’s London-listed shares advanced by almost 1 per cent.

NEW YORK

Wall Street’s main indices edged higher as investors awaited a bevy of results from tech mega-caps including Amazon, Meta and Apple after closing bell in New York on Thursday. Paring earlier declines, the S&P 500 and the Nasdaq Composite indices had advanced by around 0.7 per cent by early evening in Dublin, while the Dow Jones Industrial Average gained 0.5 per cent after Wednesday’s sell-off.

Merck climbed 1.9 per cent after the drug-maker posted upbeat fourth-quarter results, while Dow component Honeywell dropped 4.3 per cent after the diversified industrial firm forecast a weak first-quarter profit.

Shares in coat-maker Canada Goose added 1.7 per cent after beating fourth quarter sales forecast. Train operator Norfolk Southern gained close to 1.7 per cent amid reports that an activist investor has taken a $1 billion stake in the business and aims to wrest control of the company’s board and oust chief executive Alan Shaw. – Additional reporting: Bloomberg, Reuters

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