Global stock markets trade lower as hopes for rate cut dim

Global stock markets traded lower on Tuesday after Federal Reserve chairman Jerome Powell said more evidence was needed before cutting interest rates.

Dublin

Euronext Dublin finished the day down 13 basis points, but it nonetheless slightly outperformed international peers.

Box-maker Smurfit Kappa’s shares were down 0.4 per cent at the end of its last day of trading on the Irish stock market in advance of the group’s planned $24 billion (€22.4bn) merger with US-based WestRock on Friday to create the world’s largest paper packaging giant.

Among the other main movers was insulation specialist Kingspan, which was up 2.8 per cent at close of business.

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It was a bad day for the banks, however, as AIB and Bank of Ireland sank 1 per cent and 1.9 per cent respectively.

Elsewhere, shares in budget airline Ryanair dipped despite new figures showing the carrier’s monthly passenger total exceeded 19 million for the first time in June. The airline carried a total of 19.3 million passengers last month, which represents an increase of 11 per cent on the same month last year, but the group’s share price was down 1.6 per cent at close of business.

London

The FTSE 100 sank 0.56 per cent to close at its lowest level for two months amid weakness across European trading.

Sainsbury’s was one drag on the index after the retailer was impacted by lower sales at its Argos business and general merchandise arm. The supermarket group said total grocery sales lifted 4.8 per cent over the quarter to June 22nd, although this was the slowest seen for many quarters as food inflation eased back significantly. Shares in the business finished 2.87 per cent lower at 250.4p at the close.

Shell was in the green as the energy giant confirmed it will pause building work on one of Europe’s largest biofuel plants following a slowdown in demand growth for the low-carbon fuelling method. The firm, which also benefited from an uptick in oil prices, said the move would help to “control costs”. Shares in the group were 0.42 per cent higher at 2,869.5p.

ShoeZone was on a weak footing after the high street chain sold fewer shoes than expected between April and June, and warned over profits due to bad weather and high shipping costs. It finished 11.48 per cent lower at 135p after the second reduction to profit guidance in recent months.

Catering giant Compass was knocked by a warning from French rival Sodexo that sales will be lower than expected in the third quarter. It finished down 1.38 per cent at 2,143p.

Europe

The main indexes on the continent dipped again despite bond prices steadying slightly as political uncertainty continued to unsettle the markets.

Axel Rudolph, senior market analyst at IG, said: “Despite the euro area inflation rate slowing to 2.5 per cent year-on-year and the euro zone jobless rate holding steady at a record low of 6.4 per cent, European stock indices continue to fall. A slightly higher-than-expected year-on-year core inflation reading of 2.9 per cent and concerns regarding the second round of the French legislative elections on Sunday might be to blame.”

The Cac 40 in France ended 0.3 per cent lower and the Dax index was down 0.75 per cent at the close.

New York

The Nasdaq and the S&P 500 edged up, boosted by gains in Tesla and megacap stocks, while the Dow was flat with investors assessing Federal Reserve chairman Jerome Powell’s comments on the need for more evidence before cutting rates.

Tesla leapt 8.6 per cent to its highest since the start of January after the EV maker reported a smaller-than-expected 5 per cent drop in vehicle deliveries in the second quarter, pushing the consumer discretionary sector to the top of the S&P 500 sector indexes.

Megacap stocks such as Apple climbed 1 per cent, while Amazon.com and Alphabet also edged up, with US Treasury yields slipping across the board. – Additional reporting: Agencies

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