Global stocks fall on fears of raised interest rates

Stocks fell across the board and treasury yields surged on Tuesday as concern ramped up that central banks will have to boost interest rates sooner than expected.

Dublin

Euronext Dublin finished down 1.6 per cent, slightly underperforming relative to international peers, dragged down by some of the bigger names on the index.

Budget airline Ryanair and building materials giant CRH led the way as they shed 2 per cent and 2.1 per cent respectively. Elsewhere, packaging company Smurfit Kappa was down 1.5 per cent, while Kerry Group was down 1.3 per cent.

The only green on the board was in the banks, as AIB and Bank of Ireland climbed 1.3 per cent and 0.8 per cent respectively. "The only thing I can think of is that it's an interest rates thing," said a trader. "As interest rates go higher, banks have a better chance of being profitable."

Shares decline as central bankers signal interest rate rises

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Meanwhile, in the building merchants sector, insulation specialist Kingspan and Woodie's parent Grafton Group were also both lower. The same trend was observed among the listed homebuilders, with Glenveagh Properties and Cairn Homes both down on the day.

London

The FTSE 100 also ended lower, weighed down by shares of consumer companies and industrial stocks, while improving employment conditions in the UK and rising US treasury yields signalled growing bets of tighter monetary policies.

The blue-chip FTSE 100 index fell 0.6 per cent, with consumer-focussed companies such as Diageo and Unilever and industrial stocks under pressure.

Unilever extended declines from the previous session, and was down 4 per cent, near a five-year low, as the company signalled on Monday it would pursue a deal for GSK’s consumer business, calling it a “strong strategic fit”.

THG dropped 9.6 per cent after the online retail platform warned its adjusted core earnings margin would fall short of market expectations due to adverse currency movements.

Just Group gained 8.2 per cent as the insurer said its retirement income and new business profits grew last year.

Europe

European shares closed at a one-week low on Tuesday, with tech stocks losing the most on the back of US interest rate fears. The pan-European Stoxx 600 index dropped 1 per cent. Tech stocks declined by 2.2 per cent, the most among their peers, as they resumed a losing spree that began at the start of the year.

Among individual stocks, Swiss asset management firm GAM Holding slumped 16.7 per cent after saying it expected to post a roughly 30 million Swiss franc (€28.9 million) net loss for 2021 when it reports earnings next month.

French food caterer Sodexo rose 1.7 per cent after Reuters reported Bain Capital was looking to bid for a stake in its benefits and rewards services unit.

Chocolate maker Lindt & Spruengli fell 3 per cent after it said sales of its upmarket chocolates will likely grow at a slower pace in 2022 than last year, due to supply chain bottlenecks.

New York

Wall Street's main indices fell with Goldman Sachs leading declines among banks after posting its quarterly profit below expectations, while big technology stocks were slammed by the rising treasury yields.

Goldman’s plunged 7.7 per cent after missing fourth-quarter earnings estimates on weak trading activity, dragging the S&P 500 banks index down by 2.4 per cent.

Google's Alphabet, Apple, Meta and Amazon dropped between 1.5 per cent and 3.4 per cent.

Activision Blizzard surged 27.1 per cent after Microsoft said it would buy the videogame publisher for $68.7 billion (€60.7 million) in cash, the largest deal in the sector.

Microsoft's shares slid 1.7 per cent, while other gaming stocks Electronic Arts and Take-Two Interactive gained 5.2 and 3.7 per cent, respectively.

Airbnb dropped 3.3 per cent after Gordon Haskett cut the home rental firm's shares to "hold". (Additional reporting: Agencies)