Shares tumble on Fed chief’s hawkish Jackson Hole comments

Stocks slid on Friday after US Federal Reserve chairman Jerome Powell said he was prepared to raise interest rates further to keep inflation at bay.

European markets had been sitting pretty on Friday afternoon until the hawkish speech at the Jackson Hole central banking conference. Wall Street unsurprisingly plunged after the opening bell following the speech, with the FTSE among indices to swing down into the red as a result.

Dublin

The Iseq fell more than 2 per cent, ending the week in negative territory. The losses were across the board, with banking, building, food and leisure stocks all hit. Bellwether stock CRH fell 2.25 per cent to end at €37.88, while Kerry was off 2.8 per cent and Glanbia lost 1.15 per cent. Banking stocks were also lower, with AIB down just under 1.5 per cent at €2.134 and Bank of Ireland losing 1.3 per cent to close at €5.728. Ryanair saw its shares shed almost 4 per cent, closing at €12.10 for the week. Paddy Power owner Flutter was also lower, losing more than 3 per cent over the session to finish at €125.75. Insulation specialist Kingspan bucked the negative trend, adding almost 1 per cent to its share price and closing at €57.52.

London

UK stock indexes fell on Friday to log their biggest weekly decline since mid-June as concern mounted about the cost-of-living crisis. The blue-chip FTSE 100 index, which comprises companies with global operations, ended 0.7 per cent lower led by declines in industrial and financial stocks, while the domestically focused FTSE 250 index slipped 0.4 per cent.

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Holiday Inn-owner IHG slid 4.4 per cent to the bottom of the FTSE 100 index after JP Morgan downgraded the stock to “neutral” from “overweight”. Both the FTSE 100 and the FTSE 250 index logged weekly declines, with the latter sliding 3.6 per cent reflecting the impact of surging prices on business activity and the central bank policymakers’ aggressive tone on interest rates despite signs of economic slowdown.

Among the gainers, Micro Focus International plc soared 94.1 per cent after Canada’s OpenText said it agreed to acquire the enterprise software maker in an all-cash deal of $6 billion (€6bn) including debt.

Oil major Shell edged higher but peer BP ended down 0.4 per cent after sources told Reuters that the timing for the start of its Whiting, Indiana refinery is unknown.

Europe

European stocks fell as investors fretted over downbeat German consumer sentiment data due to rising energy costs.

Consumer morale in the euro zone’s two biggest economies diverged starkly in August as French consumers benefited from fresh government measures while concerns over rising energy bills hit their German counterparts, surveys showed on Friday. European indices also dropped as they were also weighed down by a report that the European Central Bank was looking to discuss a 75-basis point rate hike in two weeks time.

The pan-European Stoxx 600 index lost 1.68 per cent. The German Dax decreased 2.26 per cent by the end of the session, while the French Cac dropped by 1.68 per cent.

New York

The Nasdaq-led Wall Street sharply lower on Friday after Federal Reserve chief Jerome Powell signalled the central bank would keep raising interest rates to tame inflation, sparking a sell-off in growth and technology stocks. Data earlier showed consumer spending barely rose in July, but inflation eased considerably which could give the Fed room to scale back its aggressive interest rate increases.

Dell Technologies fell 11.9 per cent as it joined rivals in predicting a slowdown as runaway inflation and the darkening economic outlook prompt consumers and businesses to tighten their purse strings.

Affirm Holdings tumbled 20.7 per cent after the buy-now-pay-later lender forecast full-year revenue below Wall Street estimates, underscoring the broader downturn in the fortunes of the once high-flying fintech sector. — Additional reporting: Reuters, PA