European shares give up early gains as investors grow cautious

European shares gave up early gains and closed lower on Wednesday as investors exercised some caution ahead of the US Federal Reserve’s interest rate hike decision.

Wall Street’s main indices also slipped ahead of the Fed’s decision after a bigger-than-expected increase in October private payrolls offered more evidence of labour market resilience. The US central bank confirmed its fourth straight 75 basis points increase at 6pm Irish time.

Dublin

The Iseq edged 0.6 per cent lower in a subdued session, which saw its biggest stock, the US-exposed building materials company CRH, drop 1.9 per cent to €35.77.

Ryanair was also a faller, sliding almost 2.2 per cent to €12.02, while packaging group Smurfit Kappa declined by 2.15 per cent to €32.81. Food group Glanbia lost ground, closing 2.3 per cent lower at €11.43, and AIB fell 1.5 per cent to €2.91.

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Bank of Ireland managed a gain, however, nudging up 0.3 per cent to €7.51, while Kerry Group added 1.1 per cent to €88.16 and Flutter Entertainment was one of the better performers on the day, climbing almost 1.6 per cent to €136.75.

London

The FTSE 100 index also slipped 0.6 per cent, weighed down by cyclical sectors and shares of British American Tobacco. The tobacco giant tumbled 5.5 per cent after analysts at Goldman Sachs downgraded the stock to “neutral”.

Economically sensitive sectors such as mining, energy and chemicals stocks fell between 0.8 per cent and 2.5 per cent as the market braced for the Fed’s decision. The Bank of England is also expected to tighten rates by 75 basis points on Thursday.

The mid-cap FTSE 250 rose 0.1 per cent, lifted by Lloyd’s of London insurer Hiscox after it posted a 6.3 per cent rise in gross premiums written.

Aston Martin slumped 15.3 per cent after the luxury carmaker cut its annual deliveries and margin forecasts, blaming global supply chain issues. Next rose 1.6 per cent after the clothing retailer stuck to its earlier guidance.

Europe

The pan-European Stoxx 600 index slipped 0.3 per cent to snap a three-day winning run that took it to near seven-week highs. Personal and household goods, mining stocks and technology sectors in Europe were among the worst hit, down between 1.3 per cent and 1.8 per cent.

Bucking the trend was the healthcare sector, boosted by a 7.4 per cent jump in Novo Nordisk after it raised its full-year earnings outlook.

The Stoxx 600 posted solid gains last month with a better-than-expected earnings season easing some worries about the euro zone slipping into a recession as the European Central Bank (ECB) promised more monetary policy tightening. Data showed the decline in euro zone manufacturing activity was sharper than initially estimated last month, indicating that the sector is in recession.

Among other stocks, Maersk slid 5.8 per cent as the Danish shipping group warned of slowing demand for transport and logistics and cut its forecast for container demand this year.

Danish hearing aid maker Demant tumbled 15.1 per cent after it cut its full-year revenue and profit guidance for the second time in the year.

New York

Wall Street’s main indices fell in early trading, as data providing further evidence of a strong labour market fuelled concerns that the Federal Reserve would not have enough reason to temper its aggressive approach on interest rate hikes.

Advanced Micro Devices rose 2.2 per cent after it forecast some strength in its data centre business, while Airbnb tumbled 8.9 per cent on a bleak holiday-quarter revenue forecast.

CVS Health advanced 4.6 per cent after raising its annual profit forecast, while Estee Lauder cut its full-year sales outlook, sending the cosmetics maker’s shares down 9 per cent.

Tinder-owner Match Group rose 8.5 per cent after reporting better-than-expected third-quarter revenue.

– Additional reporting: Reuters