European shares retreat on rising bond yields

European shares posted their biggest one-day drop since late November on Monday as rising bond yields weighed on the heavyweight technology sector, while the rapid spread of the Omicron Covid-19 variant also dented sentiment.

DUBLIN

The Irish index of shares dipped 1 per cent on Monday, following more negative sentiment across Europe.

Building stocks were lower, with CRH falling 1.3 per cent to €46.25 and Kingspan slumping 5.7 per cent to €96.02. That mirrored a decline in similar stocks in London as Britain ordered house builders to pay about $5.4 billion to help remove dangerous cladding from buildings following the deadly Grenfell Tower fire in London in 2017.

Banking stocks were mixed, with AIB was up 5.15 per cent to €2.43, while Bank of Ireland was more muted, gaining 0.11 per cent to finish the day at €5.51. Permanent TSB declined 1.85 per cent, dipping to €1.59.

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Smurfit Kappa also lost ground, falling 1.2 per cent over the session to end at €49.08.

Hotel group Dalata was 0.77 per cent higher at €3.95 by the time markets closed for the day, while nutrition group Glanbia was 1 per cent up, ending at €12.67.

LONDON

The Ftse 100 ended 0.5 per cent lower following weekly gains spurred by a rotation into sectors such as banks, oil and gas and mining as investors priced in faster interest rate hikes by major central banks.

Large dollar earners including Diageo, Unilever, British American Tobacco, Reckitt Benckiser gained 0.7-2 per cent, lifted by the weaker pound.

Berkeley Group, Barratt Developments, Persimmon and Taylor Wimpey were down 3.0-2.8 per cent as British housing minister Michael Gove set an early-March deadline for the industry to agree to a fully funded plan of action, including a dedicated fund to deal with unsafe cladding.

Persimmon had the least risk due to its low exposure, while Barratt, Bellway, Berkeley & Taylor Wimpey all had the higher risk of a more meaningful step up in provisions, Jefferies analysts said.

House builders Redrow, Countryside Properties, Bellway and Vistry Group dropped 2.8-4.4 per cent, while the Ftse 250 index slipped 1.5 per cent, recording its fourth consecutive-session in losses.

Big banks such as HSBC, Barclays and Standard Chartered rose about 1 per cent each, building on last week's gains.

Biotech firm Avacta Group slumped 33.4 per cent after it said it was halting sales of its Covid-19 antigen lateral flow test, AffiDX, to replace antibodies in the device and boost its ability to detect the Omicron variant at lower viral loads.

EUROPE

The pan-European Stoxx 600 closed 1.5 per cent lower, with technology stocks tumbling 3.6 per cent to a near three-month low. Losses were spread out across most European sectors.

Credit Suisse rose 1.3 per cent after traders cited media speculation about a possible sale or merger of the embattled Swiss bank.

Carige rose 1.0 per cent after a report said BPER Banca , Italy's fifth-largest bank, had improved its offer to prevail over rival suitor Credit Agricole Italia.

BMW gained 1.7 per cent after Goldman Sachs upgraded the German car giant to "buy" from "hold", saying the consolidation of the BMW Brilliance Automotive joint venture should result in earnings growth this year and next.

French diagnostics company Eurofins Scientific dipped 4.7 per cent after Jefferies downgraded the firm to "hold" from "buy", saying Covid-19 testing had lifted the stock towards its target price.

French technology consulting company Atos slumped 16.8 per cent to the bottom of the Stoxx 600 after issuing a profit warning that reflected customer deal delays and pressured margins at its hardware and software resales unit.

NEW YORK

Stocks were on pace for their longest losing streak since September as prospects for higher rates and inflation unsettled global markets.

The S&P 500 fell for a fifth straight day, with megacaps like Apple and Amazon. com slumping more than 2 per cent.

Some of the most speculative pockets of the market bore the brunt of the selling. Cathie Wood’s flagship ARK Innovation exchange-traded fund sank as much as 5.1 per cent, bringing its five-day rout past 17 per cent.

GameStop and AMC Entertainment Holdings drove so-called meme shares lower.

Treasury 10-year yields hovered near 1.8 per cent. The fast-spreading Omicron strain is adding to concern about corporate earnings.

Lululemon Athletica tumbled after the maker of yoga pants warned that financial results will come at the low end of its previous guidance, saying the coronavirus variant was constraining its operations. Torrid Holdings plunged after the plus-size women's clothing retailer cut its sales forecast as Omicron caused disruptions to its workforce.