Markets flat as falls in airline and leisure stocks bite

Leading European stocks lost ground in September following a seven-month winning streak.

Markets closed flat or down on Thursday as falls in airlines and leisure cancelled out gains elsewhere.

DUBLIN

Ryanair fell 3.09 per cent to €16.33. Dealers said market volatility across Europe hit airlines, but added that the Irish group "outperformed" most peers, whose stock fell at faster rates.

“Things have been more volatile in this sector, it can swing more than others,” said one Dublin trader on Thursday. Airlines, including the Irish player, gained altitude at the beginning of the week.

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Paddy Power and Betfair-owner Flutter Entertainment closed 2.73 per cent down at €171.10 on general weakness in betting stocks.

Index heavyweight building materials group CRH dipped 0.66 per cent to €40.56.

Ingredients and convenience food specialist Kerry Group climbed 1.27 per cent to €116. Dealers noted that defensive stocks in sectors such as food did well on the day.

Among smaller stocks, hotelier Dalata rose 1.49 per cent to €4.10. Traders said there was no particular reason for the move.

LONDON

Aer Lingus and British Airways owner International Consolidated Airlines Group slid 4.38 per cent to 178.5p on a tough day for its industry. Low-cost player and key Ryanair rival EasyJet closed 2.53 per cent down at 662.8p.

Online fashion retailer Boohoo tumbled 15.1 per cent to 271.3p after it warned that freight inflation in its supply chain and higher wages for workers would hit full-year profit margins.

“This is not Boohoo’s best look. It is spending heavily on increasing capacity and if sales don’t grow to match it it will have serious implications for profits,” said Sophie Lund-Yates, an analyst at Hargreaves Lansdown.

Guinness owner and whiskey maker Diageo rose 1.3 per cent to 3,600.6p on a forecast boost to operating margins on the back of higher spending on premium brands and at restaurants and bars.

AstraZeneca shares climbed 1.4 per cent to 8,958p after its Covid-19 vaccine showed 74 per cent efficacy at preventing symptomatic disease in a US trial.

EUROPE

Europe’s benchmark Stoxx 600, which tracks leading shares across 18 markets, ended September with losses of 3.4 per cent, breaking a seven-month bull run. Analysts said a surge in government bond yields drove investors away from high-growth sectors.

Air France KLM shed 7.52 per cent to €4.23, reflecting a general trend across Europe. Germany's Lufthansa was 4.99 per cent off at €5.94.

Irish-linked baker Aryzta climbed 6.5 per cent to 1.40 Swiss francs. Dealers said there was no news behind the move, but suggested that investors were swerving into defensive stocks including food.

Sweden's H&M was 3.4 per cent lower at 178.36 kroner after the retailer said supply disruptions hit sales in September.

Another Swedish group, cloud communication services provider Sinch rose 3.1 per cent to 171.10 kroner after saying it had agreed to buy cloud-based email delivery platform Pathwire in a deal worth about $1.9 billion.

US

Wall Street’s main indices rose on Thursday at the end of a bruising month as investors kept a close watch on funding talks in Washington to prevent a government shutdown.

In early afternoon trade the benchmark S&P 500 was still on course to snap its seven-month winning streak due to worries about inflation, fallout from China Evergrande's potential default and wrangling over the debt ceiling.

The energy sector was the biggest loser on Thursday, but was headed for its best monthly performance since February.

The S&P financials sector was also tracking its sixth straight quarterly gain. Heavyweight tech stocks edged higher, recovering from steep losses suffered earlier this week.

Excluding Netflix, which was poised to gain 8 per cent for September, leading tech stocks shed combined $415 billion in value through the month after the Federal Reserve's hawkish shift on monetary policy sparked a rally in Treasury yields and prompted investors to move into sectors that stand to benefit the most from an economic revival. – Additional reporting: Reuters