Markets

Global shares fall as geopolitical tensions spook investors

Euronext Dublin underperformed relative to other international markets as it slid on the bank holiday, albeit on low volumes

Traders pulled bets that US interest rates would fall after Fed chairman Jay Powell effectively ruled out a March rate cut. Photograph: Michael Nagle/Bloomberg

Colin Gleeson
Mon Feb 5 2024 - 19:28

Global shares fell on Monday and government bond yields surged off the back of geopolitical tensions, volatility in China, and a scorching US jobs report that dashed expectations of a near-term interest rate cut.

Dublin

Euronext Dublin underperformed relative to its international peers as it finished the day down 0.7 per cent on lighter volumes than normal.

Among the financial names, Bank of Ireland was down 2 per cent at close of business, while AIB was unchanged.

In construction, insulation specialist Kingspan dropped 3 per cent. Its Danish peer Rockwool was down 3.7 per cent and there tends to be correlation between the two because they operate in similar markets, a trader said.

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Woodie’s parent Grafton Group was also caught up in the sectoral move as it finished the day down 2.3 per cent

Among the leisure and tourism names, Dalata – the biggest hotel operator in the State – had a good day as it climbed 3 per cent after broker Numis initiated coverage with a “buy” recommendation. Elsewhere, Ryanair was down 1.4 per cent, while its peers EasyJet and Lufthansa were down 1.2 per cent and 2 per cent respectively.

“Ryanair gave up some of its gains and ran out of steam a little bit after delivering very good numbers last week,” a trader noted.

London

The FTSE 100 was little changed as it avoided some of the larger falls of its international peers on the back of the falling value of the pound on international markets.

In company news, shares in CMC Markets soared 18.22 per cent after the business revealed plans to start cutting costs.

The £21 million (€24.5 million) cost-cutting drive will include the axing of about 200 jobs, the spread-betting platform said.

Elsewhere, shares in telecoms giant Vodafone closed down 2.74 per cent despite the business saying that revenue from its UK service segment rose 5.2 per cent in the last three months of the year. Reported global sales dropped by 2.3 per cent, Vodafone said.

Europe

Shares on the continent closed lower as government bond yields across mainland Europe jumped on lower expectations about imminent interest rate cuts by major central banks, eclipsing gains brought by some upbeat corporate reports.

The pan-European Stoxx 600 index ended 0.1 per cent lower after closing out the previous week flat. The MSCI World index fell 0.6 per cent.

Shares of European miners dropped 1.7 per cent as most metal prices fell on a stronger dollar, while retail shares dipped 2.2 per cent.

Shares in Spain’s main stock market index were the worst hit across European bourses, down 1.2 per cent.

New York

Wall Street’s main indexes fell as Treasury yields rose after Fed chair Jerome Powell pushed back firmly against market speculations of imminent rate cuts, while investors assessed earnings from corporate America.

Caterpillar jumped 1.2 per cent after a higher quarterly profit, while Estée Lauder surged 14.6 per cent as the MAC lipstick maker aims to cut about 3 per cent to 5 per cent of its workforce.

In early trading, the Dow Jones Industrial Average fell 0.66 per cent; the S&P 500 was down 0.41 per cent; and the Nasdaq Composite was down 0.45 per cent.

Boeing dropped 2.1 per cent after saying a new quality glitch in some 737 MAX planes would delay some deliveries.

Tesla lost 3.4 per cent after Piper Sandler slashed the stock’s price target and on a report German software company SAP will no longer source its company cars from the EV maker.

Nvidia jumped 4 per cent to a record high following a price-target raise by Goldman Sachs.

Catalent soared 10 per cent to an all-time high on Novo Nordisk parent Novo Holdings’ plans to buy the contract drugmaker in an $11.5-billion all-cash deal. (Additional reporting: Agencies)

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter

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