European shares slide as investors worry about US rate hikes

European shares fell almost 2 per cent on Wednesday, as investors grappled with the twin worries of aggressive US interest rate hikes potentially hurting growth and more western sanctions on Russia further stoking inflation. Losses were broad-based, with technology and travel stocks the biggest drags.

Federal Reserve governor Lael Brainard said on Tuesday she expected interest rate rises and a rapid balance sheet runoff to take US monetary policy to a "more neutral position" later this year. Her comments sparked a global selloff.

DUBLIN 

The Iseq fell 3.1 per cent as stock markets went into decline. Building materials group CRH fell 2.6 per cent to €34.94, while Ryanair dropped almost 3.5 per cent to €12.88.

Smurfit Kappa had a weak day, with the packaging group falling 5.8 per cent to €37.50. Kingspan, another company to recently announce it is exiting Russia, dropped 6.2 per cent to €85.38, while a third Irish company to leave Russia, food group Kerry, fell 1.1 per cent to €102.10.

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AIB slid 2.3 per cent to €1.90, while Bank of Ireland edged up 0.35 per cent to €5.68 on a day when it commenced its share buyback programme.

Dalata Hotel Group ended 1.8 per cent lower at €3.82. The company opened a new Clayton Hotel in Bristol, extending its expansion into the UK, where it now has 17 hotels.

LONDON

The blue-chip FTSE 100 index closed 0.3 per cent lower, dragged down by Unilever. The consumer goods giant fell 1.1 per cent after analysts at Barclays cut its price target on the Dove soap maker's stock. However, gains in AstraZeneca and other stocks helped limit losses on the index.

Tobacco company Imperial Brands gained 3.3 per cent to top the FTSE 100 after it forecast higher first-half profit. Shares of rival British American Tobacco also rose 2.4 per cent.

Hyve Group jumped 8.2 per cent after the events group said it would sell its Russian business following boycott warnings from customers. Design and engineering company Avon Protection slumped 19.1 per cent after it said first-half profitability was hit by weaker-than-expected sales and higher costs.

Meanwhile, the UK froze the assets of Russian banks Sberbank and Credit Bank of Moscow, and said it would end all imports of Russian coal and oil by the end of 2022.

EUROPE

Breaking a three-day winning streak, the pan-European Stoxx 600 index fell 1.5 per cent to log its worst day in nearly a month, after the EU proposed to ban Russian coal and oil imports.

Further fuelling concerns about slowing growth, data showed German industrial orders fell more than expected in February on weaker demand from abroad. In Frankfurt, the Dax fell 1.9 per cent, while the Cac 40 in Paris finished 2.2 per cent lower.

Among individual stocks, Danish wind turbine maker Vestas fell 3.2 per cent after it said it would withdraw from Russia, where the firm has two factories.

Shares of Siemens Gamesa, another wind turbine maker, dropped 6.2 per cent on reports that turbine parts fell into a sea at a wind farm in Denmark.

NEW YORK

The Nasdaq slumped 2 per cent in early trading as tech stocks extended their selloff for a second straight day on mounting concerns over aggressive actions by the Federal Reserve to fight inflation.

Shares of mega-cap growth companies such as Microsoft, Apple and Amazon. com tumbled between 2.2 per cent and 3.3 per cent, dragging down the Nasdaq and the S&P 500. High-growth stocks, whose valuations stand to be pressured by higher bond yields, bore the brunt as the benchmark 10-year yield hit a three-year high.

JetBlue Airways slid 8.4 per cent after the carrier said it made an unsolicited $3.6 billion bid for Spirit Airlines, potentially snarling merger plans between the ultra-low-cost carrier and Frontier Group Holdings. – Additional reporting: Reuters