European shares fall further as tech and retail stocks decline

European shares declined again on Friday, wrapping up their worst week in two months as tech stocks and retailers felt the brunt of a sell-off as investors digested the prospect of interest rate hikes.

Tech shares took cues from declines in growth stocks on Wall Street, which were dragged down by elevated US Treasury yields. Oil prices climbed for a third straight session, shrugging off concerns about global economic growth.

DUBLIN

The Iseq slid 1.5 per cent as sentiment among investors stayed negative. Ryanair dropped 1.2 per cent to €13.66 after weak results from Aer Lingus owner International Consolidated Airlines Group (IAG) and a slowing of its plan to increase its flight schedule.

The interest rate on Irish 10-year debt rose from 1.75 per cent to 1.84 per cent in response to global inflationary fears.

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Among other equities, building materials group CRH fell 1 per cent to €36.99, while food group Kerry dropped 2.3 per cent to €100.25.

Packaging group Smurfit Kappa declined 2.1 per cent to €39.13, while Bank of Ireland finished 3.2 per cent lower at €5.54.

LONDON

UK stock indexes posted their biggest weekly declines in two months on Friday, hit by a recession warning from the Bank of England and disappointing results from British Airways parent company IAG.

The aviation group tumbled 8.3 per cent after it reported a bigger-than-expected quarterly operating loss and scaled back plans to ramp up short-haul flights at Heathrow airport.

The blue-chip Ftse 100 closed down 1.5 per cent and the domestically oriented mid-cap Ftse 250 index fell 1.4 per cent, resulting in weekly losses of 2.1 per cent and 4.3 per cent respectively.

The Bank of England warned on Thursday that Britain risked the double-whammy of a recession and inflation above 10 per cent as it raised interest rates to their highest since 2009.

Among the bright spots, insurer Beazley gained 5.9 per cent after it reported a surge in quarterly gross written premium. Digital advertising group S4 Capital jumped 9.8 per cent after full-year results showed a jump in its 2021 gross profit.

EUROPE

The pan-European Stoxx 600 index fell 1.9 per cent, with retailers down 2 per cent and technology stocks off 2.4 per cent. The retail index hit its lowest in two years after a string of weak earnings reports that highlighted the fallout from surging inflation, the Ukraine war and a fresh round of lockdowns in China.

Adidas dropped 3.6 per cent as it lowered expectations for 2022 sales, with renewed Covid-related lockdowns in China hitting the German sportswear company.

ING Groep, the largest Dutch bank, fell 4.7 per cent as it posted worse-than-expected quarterly net income, including a surge in provisions for bad loans due to its exposure in Russia and Ukraine.

Danish medical device maker Ambu tumbled 11.8 per cent after providing a downbeat forecast for full-year earnings due to supply-chain issues and hospital labour shortages.

Spanish pharmaceuticals company Grifols gained 9.4 per cent as it reported the volumes of blood plasma it collected reached pre-pandemic levels in the first quarter.

US

Wall Street indexes extended Thursday's losses in the first hours of trading on Friday, as higher US Treasury yields took their toll on growth stocks. Data showed stronger-than-expected US jobs growth, exacerbating fears of bigger interest rate hikes by the Federal Reserve.

Mega-cap growth stocks Google-parent Alphabet, Apple, Microsoft, Meta Platforms, Tesla and Amazon. com fell 0.1-1.8 per cent.

Under Armour slumped 24.3 per cent after the sportswear maker forecast downbeat full-year profit, as it grapples with higher transportation costs and a hit to its business from renewed Covid-19 curbs in China. Shares of rival Nike slipped 5.4 per cent.