Business

French political uncertainty weighs on stocks as banks take hit

Iseq index sheds 1.5% as investors take a risk-off approach

French president Emmanuel Macron's decision to call a snap legislative election weighed on French stocks on Tuesday and sent investors running to safe haven assets. Photograph: Ludovic Martin/Getty Images

Ian Curran
Tue Jun 11 2024 - 17:55

A slide in banks weighed on US stocks in advance of the Federal Reserve’s rates decision on Thursday, with political uncertainties in Europe driving traders to the safest corners of the market like US Treasuries and the dollar.

Dublin

A risk-off session for investors amid political uncertainty in Europe following EU elections over the weekend contributed to the Iseq index’s 1.5 per cent slide on Tuesday, traders in Dublin said.

In line with trends across European bourses, financial stocks led the declines. AIB shed 5.1 per cent to close at €4.92 per share, while Bank of Ireland slid by close to 2.7 per cent to €9.83. FBD Insurance, meanwhile, fell 12.7 per cent to €13.10 per share.

Amid low trading volumes home-builders Glenveagh and Cairn Homes also dropped, falling 3 per cent and 2.6 per cent to €1.33 and €1.66 per share respectively.

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Ryanair, meanwhile, compounded Monday’s 2.2 per cent decline, falling 0.8 per cent to close at €17.05 per share.

London

After edging higher in the morning UK equities finished the session down as mining stocks weighed heavily on the FTSE 100. The blue-chip index slipped by more than 1 per cent, while the mid-cap FTSE 250 index shed three-quarters of a percentage point.

Among individual stocks Rio Tinto lost 2 per cent as the mining giant said it will buy Mitsubishi’s 11.65 per cent stake in Boyne Smelters (BSL) for an undisclosed sum.

Industrial metal miners fell 1.9 per cent, the most among the FTSE 350 sectors, tracking the drop in base metal prices, with Antofagasta finishing 4.3 per cent lower, Anglo American down 0.6 per cent and Glencore down by more than 2.1 per cent.

On a more positive note shares in British microcomputer maker Raspberry Pi jumped more than a third on its first day of trading in London.

Oxford Instruments surged by more than 7.1 per cent after the nanotechnology tools maker’s full-year results beat estimates.

Europe

French stocks led losses on Europe’s main indices as both the Stoxx 50 and pan-European Stoxx 600 shed roughly 1 per cent in trading.

France’s Cac 40 was down 1.3 per cent on political uncertainties after French president Emmanuel Macron called for a snap legislative election over the weekend following a heavy trouncing of his allies in EU parliamentary elections.

French banks were among the most exposed with BNP Paribas and Credit Agricole falling by close to 3.9 per cent, and Societe Generale down 5 per cent.

Dashed takeover hopes weighed on Spain’s Naturgy Energy Group, which tumbled by more than 14 per cent.

At the other end of index Covestro was the biggest gainer as the German chemicals-maker drew closer to granting Abu Dhabi National Oil access to in-depth due diligence in expectation of an improved bid.

New York

US equities were mixed, with banks notching some of the biggest declines on the session as investors wait for Wednesday’s key Federal Reserve meeting.

The S&P 500 backed down from the previous day’s record closing high. The Dow Jones Industrial Average joined the S&P 500 in negative territory, while the tech-heavy Nasdaq was modestly green as Fed policymakers prepared to convene for their two-day policy meeting. Big financial names like JPMorgan Chase and Citigroup were caught in the crossfire.

Apple shares, meanwhile, notched their first intraday record since December in the wake of the company’s annual Worldwide Developers Conference, where it showcased a number of features related to artificial intelligence (AI) and announced a partnership with ChatGPT-maker OpenAI.

Shares in General Motors improved by 0.25 per cent after the automaker authorised a new $6 billion (€5.6bn) share buyback plan as improving profitability in its primary business and growth in electric vehicles allows the automaker to return cash to investors. – Additional reporting: Bloomberg, Reuters

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times

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