Global stocks tumble after US figures show inflation ‘far from over’

Global markets took a turn for the worse after new figures revealed US inflation unexpectedly ticked up last month, stamping out hopes of the Fed ending its cycle of interest rate hikes.

The personal-consumption expenditures price index, seen as the Fed’s preferred gauge of inflation, showed a month-on-month increase of 0.6 per cent in January, up from 0.2 per cent in December. Analysts said it means the Fed is unlikely to pause interest rate rises as separate figures showed households had stepped up spending during the month.

The reading prompted a sell-off across international markets.

Dublin

The Iseq Allshare index closed 1.22 per cent weaker after giving up early gains.

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Bank of Ireland rose 2.5 per cent on its plans to bring back banker bonuses. The less positive economic outlook globally saw Ryanair drop 2.2 per cent to €14.53. After a strong week Paddy Power Betfair-owner Flutter gave up some of its gains, falling 7 per cent to €147.40.

Elsewhere on the Irish bourse building materials giant CRH traded flat, while packaging group Smurfit Kappa ended the session marginally up.

London

UK stocks ended lower on Friday with the blue-chip FTSE 100 falling 0.4 per cent and the midcap FTSE 250 dropping 0.5 per cent.

Mining stocks such as Anglo American, Rio Tinto and Antofagasta fell in the range of 2.7 per cent and 5.4 per cent.

Cineworld plunged 43.1 per cent after the cinema chain operator said its shareholders may see the value of their equity wiped out as it looks to exit from Chapter 11 bankruptcy protection following its failure to find a buyer.

British Airways and Aer Lingus-owner IAG fell 6.5 per cent as the group’s debt remained higher than its market capitalisation despite forecasting that its earnings could jump almost 90 per cent this year.

Europe

European shares also slid on the US data to end the week lower. The STOXX 600 index fell 1 per cent, reversing early gains, dragging it to a loss of 1.4 per cent for the week.

Building materials group Compagnie de Saint-Gobain gained 4.8 per cent after posting record annual revenue, while radiation therapy equipment Elekta jumped 9.2 per cent to the top of the STOXX 600 after its third-quarter earnings beat expectations. But German chemicals giant BASF fell 7.9 per cent as it flagged a decline in annual earnings and said it plans to cut 2,600 jobs and halt buy-backs.

New York

Wall Street’s main indices tumbled and were on course for their worst weekly performance of the year.

Megacap stocks including Tesla, Amazon and Nvidia slid in the range of 1.3 per cent and 2.3 per cent as Treasury yields rose. Boeing slid 4.3 per cent after the Federal Aviation Administration said the planemaker temporarily halted deliveries of its 787 Dreamliner jets. Beyond Meat surged 13.5 per cent as the plant-based meat-maker’s results indicated that its cost-control measures were finally bearing fruit. – Additional reporting Reuters