Airlines take a hit over worries on inflation and oil prices

Growing fears of a cut in Russian gas supplies to Europe, along with the prospect of interest rate hikes and a possible recession, hit markets on Tuesday.

Dublin

Airline Ryanair fell 3.85 per cent to €13.845. Traders said investors feared the impact of inflation and oil price rises on air travel this year. Ferry company Irish Continental Group slipped 1.23 per cent on similar concerns.

Smurfit Kappa shed 2.17 per cent to €38.27 as investors factored in the likely consequences of rising gas prices for the packaging manufacturer.

Paddy Power and Betfair owner Flutter Entertainment dropped 2.32 per cent to €94.52. Dealers noted that consumer-focused stocks suffered yesterday on speculation that rising prices would hit discretionary spending.

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Bank of Ireland ended the day flat at €6.70, ahead of news of the resignation of chief executive Francesca McDonagh, but hit a high of €6.916 on Tuesday. Traders said volumes were strong as interest rate rises are likely to benefit lenders. AIB was also flat at €2.02.

London

HSBC Bank tumbled 5.7 per cent to 472.8 pence sterling after Europe's biggest bank warned that it was unlikely to buy back further shares from investors this year. The lender blamed economic weakness and rising inflation for the decision.

Aer Lingus and British Airways owner International Consolidated Airlines Group closed 3.63 per cent off at 142.14p as investors grew concerned about the impact of fuel prices and a possible recession on air travel. Low-cost carrier EasyJet shed 2.15 per cent to 556.2p.

Rising oil and mining stocks ensured the blue-chip FTSE 100 broke a losing run on Tuesday. Oil major Shell climbed 2.4 per cent to 2,124p as investors bet on further energy price increases. BP added 2.9 per cent to 379.45p.

Mining and commodities giant Glencore led advances in its sector with a 3.4 per cent advance to 464.8p as analysts at Barclays raised their price target for the stock.

Guinness owner Diageo edged 0.84 per cent up to 3,972p while Covid vaccine maker AstraZeneca closed0.96 per cent up at 10,332p.

The British domestic stocks focused FTSE 250 slipped on the day. Associated British Foods, owner of Penney's/Primark slipped 5 per cent to 1,548p after warning that inflation could force the budget fashion chain to raise prices.

Europe

Europe’s Stoxx 600 slipped late in the day with technology shares down a collective 2.3 per cent and financial stocks falling at a similar rate.

The index rallied earlier, aided by shipping group Maersk, which climbed 3.17 per cent to 18,730 Danish kroner after saying earnings before tax and write-offs this year could hit $30 billion.

At the bottom of the Stoxx 600 was Swedish medical equipment maker Getinge, which plunged 15.2 per cent to 291.6 Swedish kroner after reporting a larger-than-expected drop in quarterly profit.

Shares in French car parts supplier Faurecia slid 10.7 per cent to €20.45, dragging down the auto index, with analysts pointing to worse-than-expected guidance issued by Forvia, the group born from its takeover of German rival Hella. Faurecia also said it plans to review its activities.

The poor sector sentiment hit Air France KLM, which fell 1.75 per cent to €3.98 and Lufthansa, closed 1.6 per cent down at €7.09.

The European Central Bank should raise rates soon and has room for up to three hikes this year, policymaker Martins Kazaks told Reuters.

New York

The tech-heavy Nasdaq led Wall Street lower on Tuesday with a 3 per cent slump. Google owner Alphabet was down 3.4 per cent and Microsoft 2.9 per cent ahead of their results after the closing bell on Tuesday. About a third of the S&P 500 companies are set to report results this week.

The S&P 500 energy sector rose 2.1 per cent as oil prices rebounded following reports that Russian gas supplies to Poland were halted.

Twitter fell 3 per cent, a day after the social media platform agreed to sell itself to Tesla chief Elon Musk, while Tesla dropped 9.5 per cent . – Additional reporting: Reuters