European shares pared declines to close flat on Thursday, after the European Central Bank (ECB) interest rate cut boosted bank stocks, offsetting pressures from rising long-term bond yields.
The ECB reduced interest rates as expected and signalled more cuts may be in store as inflation normalises, even as a looming trade war with the US and plans to boost military spending drive Europe’s biggest economic policy upheaval in decades.
Dublin
The Iseq rose 0.7 per cent amid strong gains for several key stocks. Kenmare Resources surged 39 per cent to €4.90 on its Dublin listing after its founding managing director, Michael Carvill, joined forces with private equity firm Oryx Global Partners to make a bid for the company, which the titanium and zircon miner rejected. Kenmare closed 42 per cent higher on its London listing.
Dalata Hotel Group soared 16.4 per cent to €5.54 after it hired investment bank Rothschild to help with a strategic review of the business, which may lead to a formal sale.
Bank of Ireland and Kingspan, meanwhile, both saw their momentum from Wednesday continue into Thursday’s session, with the bank rising 4.1 per cent to €12.13 and the insulation giant adding 2 per cent to €83.90. Among the fallers, Kerry slipped 2.6 per cent to €96.25.
London
The FTSE 100 closed 0.8 per cent lower as rising bond yields pressured equities and continued uncertainty over US tariffs clouded the outlook for global markets. The mid-cap FTSE 250 climbed 0.2 per cent. Banking shares were the biggest drag in London, with the sector falling 2.7 per cent.
Reckitt Benckiser rose 2.1 per cent as the Dettol maker’s fixed costs declined to 20.9 per cent of net revenue in 2024 from 21.8 per cent a year earlier. Melrose Industries dropped 18.2 per cent after the aerospace parts supplier forecast 2025 revenue below expectations.
Schroders gained 12.6 per cent after the money manager outlined plans to cut costs over the next three years.
Admiral Group gained 5.2 per cent after the insurer posted a record annual profit and said it was in talks to sell its US business.
Europe
The pan-European Stoxx 600 recovered from a 0.9 per cent decline to close flat. Banks rose 0.8 per cent to a record high, but gains were capped by steep declines in British banks. Excluding the UK, bank stocks were 2.6 per cent higher.
The rise in interest rates pressured rate-sensitive sectors such as real estate, which led sectoral losses with a 2.7 per cent fall. Some caution around US president Donald Trump’s 25 per cent tariff on imports of European cars and other goods also loomed, with no clear details on their implementation.
Shares of Volkswagen rose 3.9 per cent, while BMW gained 4.3 per cent and Stellantis advanced 2.1 per cent.
Postal giant DHL gained 14.2 per cent after unveiling plans to cut about 8,000 jobs in Germany this year after reporting a 7 per cent fall in its annual operating profit.
US
Wall Street’s main indexes traded off session lows on Thursday after a cabinet official hinted that the US could take a softer stance on tariffs, while chip stocks declined.
US commerce secretary Howard Lutnick said in an interview that Mr Trump is likely to extend the one-month reprieve on tariffs on imports from Mexico and Canada to all products under a free trade pact, from what was previously granted only to automotive products. However, worries that the president could alter his stance continued to dominate sentiment.
Tariff-sensitive automakers General Motors and Ford were down about 1.1 per cent each, while Tesla fell 4 per cent.
Marvell fell 17.6 per cent after the chipmaker forecast first-quarter sales in line with analysts’ average estimate, which failed to excite investors who had expected stronger AI-driven growth. Broadcom and Nvidia also fell, pulling the broader chip index down over 3 per cent. – Additional reporting: Reuters
