All eyes will be on the United States on Wednesday as the US Federal Reserve is due to decide if it will change interest rates following its December meeting. Wall Street’s main indexes fell on Tuesday, as investors turned cautious ahead of the Fed’s last interest rate announcement of the year following stronger-than-expected retail sales data.
The Bank of England is also due to announce if it will cut rates following its meeting on Thursday, December 19th, as the FTSE dipped on strong pay data which could impact on the rate of cuts next year.
Dublin
The Iseq Overall Index closed down 0.17 per cent on Tuesday, finishing at a price of €9689.79. Food supplier Kerry Group was up 0.99 per cent, finishing the day at €91.95. Kingspan rose 0.58 per cent to €69.00. Meanwhile, Ryanair dropped marginally by 0.16 per cent to €19.30.
Marine transport and shipping group Irish Continental fell 3.37 per cent to €5.16 a share. It comes as news emerged that Holyhead ferry port in Wales will remain closed until the middle of January. In the financial sector, AIB was down 1.59 per cent to €5.27 and Bank of Ireland dropped 0.60 per cent to €8.60; moving in line with the rest of the banking market on Tuesday.
London
Britain’s FTSE 100 ended down 0.8 per cent, dropping to a three-week low on Tuesday after domestic data showing strong wage growth prompted investors to pare bets on Bank of England interest rate cuts next year.
Bunzl was the worst-hit stock on the FTSE 100, down 5.7 per cent after the business supplies distributor said that low prices, especially in continental Europe, would have a “slight impact” on its annual profit. The losses weighed on the general industrial subindex, which was down 2.3 per cent.
Official data showed British pay rose by more than expected in the three months to October, prompting investors to rein in rate cut bets for next year, lifting sterling and boosting domestic government bond yields.
The construction and materials index led sectoral losses, with a 2.4 per cent decline. Energy companies lost 1.7 per cent, tracking a fall in oil prices as Chinese economic data renewed demand concerns.
Chemring Group dropped 13 per cent to the bottom of the mid-cap index after posting lower annual underlying pretax profit. The losses weighed on aerospace and defence stocks, down 1.4 per cent.
Europe
The pan-European Stoxx 600 index ended 0.4 per cent lower on looming central bank decisions, its lowest closing level since December 2nd. It was pressured by losses in energy and bank stocks, as investors awaited a slew of major central bank decisions later in the week.
The oil and gas index dropped 1.3 per cent to its lowest level in 17 months as crude prices, slid after economic data from China renewed demand concerns.
European banks were another drag, down 1.8 per cent with Spanish lenders such as Santander and Sabadell at the forefront of losses. The broader Spanish benchmark dropped 1.6 per cent.
New York
Wall Street’s main indexes fell on Tuesday, as investors turned cautious ahead of the Federal Reserve’s last interest rate announcement of the year following stronger-than-expected retail sales data.
US retail sales increased more than expected in November amid an acceleration in motor vehicle purchases, consistent with strong underlying momentum in the economy.
The market’s focus was squarely on the Fed’s monetary policy decision on Wednesday, where a 0.25 per cent cut is all but priced in.
Rate-sensitive megacap and growth stocks were mixed, with AI giant Nvidia dropping 1.7 per cent and on track for a fourth straight session of losses, while Apple rose 0.8 per cent.
Pfizer gained 4.4 per cent after the drugmaker forecast 2025 profit roughly in line with Wall Street expectations.
Traders will now be focusing on Wednesday’s Federal Reserve announcement – its last rate decision of the year. A quarter-point cut is widely expected, but what happens in the following months is less clear.
While the US economy is resilient, the prospect of inflationary import tariffs threatened by the incoming administration of Donald Trump may give Fed officials pause about the pace of further moves. – Additional reporting: agencies
- Sign up for the Business Today newsletter and get the latest business news and commentary in your inbox every weekday morning
- Opt in to Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
