Business

Global stocks retreat from all-time highs as hopes of US rate cut fade

Investors shrug off Thursday’s interest rate cut by European Central Bank as AIB and Bank of Ireland rise

Traders working on the floor of the New York Stock Exchange. All eight S&P 500 sectors were in decline, led by rate-sensitive property stocks

Colin Gleeson
Fri Jun 7 2024 - 17:54

Global stocks retreated from all-time highs on Friday and US government debt yields jumped after unexpectedly strong US monthly jobs data doused hopes the Federal Reserve would soon follow euro zone and Canadian interest rate cuts.

Dublin

Euronext Dublin finished the day down 0.3 per cent, which was largely in line with international peers.

In the travel and leisure sector budget airline Ryanair slipped 1.7 per cent, while Dalata Group, which is the biggest hotel operator in the State, was down 2.9 per cent at close of business.

Investors shrugged off Thursday’s interest rate by the European Central Bank as AIB and Bank of Ireland rose 0.2 per cent and 1.6 per cent respectively. Permanent TSB climbed 0.3 per cent. A rate cut is generally seen as negative for banks.

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Smurfit Kappa slipped 1.2 per cent even after US paper packaging group WestRock caved in to giving additional details on its $25 billion-plus (€23bn) merger with the group to lower the risk of it being delayed by litigation.

Among the housebuilders Cairn Homes and Glenveagh Properties were down 1.4 per cent and 0.1 per cent respectively.

London

The FTSE 100 finished down 0.48 per cent as London’s markets were dragged down by weak commodity firms after a slip in metal prices.

Fresnillo and Antofagasta both dropped due to an impact from falling copper prices.

Housebuilder Bellway inched lower despite it saying falling inflation and improving consumer confidence helped push up its sales this spring. The FTSE 250 firm said the net private reservation rate, the number of people putting their names down for a new home, at its active outlets had risen year-on-year. Bellway shares finished the day down 0.65 per cent after sentiment waned late in the session.

Tennent’s and Magners maker C&C Group left a sour taste for investors after it revealed its boss Patrick McMahon has stepped down after just one year at the helm. It came after C&C said it had found failures in the company’s accounting and that opportunities had been missed to spot and address issues. Shares in the drinks firm fell by 7.57 per cent.

Saga was among the day’s notable fallers after the retirement and cruises specialist was downgraded by analysts at Peel Hunt. The brokerage cut its target price for the stock as it cautioned it is waiting for “meaningful strategic progress” in order to address Saga’s debts. Shares in the company fell 8.42 per cent.

Europe

On the continent the Euro Stoxx 600 share index, which has gained almost 10 per cent year-to-date, traded flat.

Elsewhere in Europe the German Dax index was down 0.52 per cent at the close and the Cac 40 in France ended 0.48 per cent lower.

Euro zone bonds were also lacklustre on Friday, with Germany’s 10-year Bund yield rising 8 bps to 2.619 per cent.

New York

Wall Street’s main indexes dropped after a much stronger-than-expected employment report signalled that the labour market remains robust, dimming hopes of a September start to policy easing by the US Federal Reserve.

All eight S&P 500 sectors were in decline, led by rate-sensitive property stocks. The small-cap Russell 2000 index dropped 0.7 per cent to a one-month low, while the PHLX Housing Index fell 1.4 per cent.

Among individual names GameStop dropped 1.7 per cent in volatile trading after announcing a potential stock offering and a drop in quarterly sales.

Other so-called meme stocks also fell, with AMC Entertainment and Koss Corp down 2.4 per cent and 4.3 per cent, respectively. Retail-focused trading platform Robinhood gained 1 per cent.

Meanwhile, AI darling Nvidia slipped 1.8 per cent on track to extend the previous session’s losses, with its valuation again dipping below the $3 trillion mark.

Lyft shares rose 5.3 per cent following a forecast of 15 per cent annual growth in its gross bookings through 2027 after markets closed on Thursday. – Additional reporting: Agencies

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter

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