World markets dragged lower by rising inflation fears

World markets edged lower and the dollar fell on Tuesday after data showed US inflation rose by less than expected, stoking uncertainty over Federal Reserve policy.

Dublin

Euronext Dublin underperformed relative to its international peers on Tuesday, ending the day down 0.5 per cent, held back mainly by budget airline Ryanair, which was down more than 2 per cent.

“Ryanair was caught up in the general volatility of the airline sector,” noted a trader. “Easyjet was raising money and there was some talk of IAG looking to raise cash as well, so generally a negative across the board for the airlines.”

Dalata – the largest hotel operator in the State – was down about 2.5 per cent. Elsewhere, there were mixed fortunes for some of the commercial property companies, with Hibernia Reit down 2 per cent, while Ires Reit was up 1.5 per cent.

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Among the homebuilders, Glenveagh Properties and Cairn Homes were down between 0.75 and 1 per cent, which was in line with their UK peers.

And it was a bad day for the banks, with Bank of Ireland ending the day down 1 per cent, while AIB finished down almost 4 per cent.

London

London's FTSE 100 ended lower, dragged down by heavyweight metals and banking stocks, while JD Sports Fashion jumped to the top of the index after reporting strong earnings.

The blue-chip index fell 0.5 per cent, with miners and banking stocks dropping 2.3 per cent and 1.6 per cent, respectively.

Miners Rio Tinto, Anglo American and BHP Group were under pressure after Barclays cut its price targets on the stocks.

The domestically focused mid-cap FTSE 250 index eased 0.4 per cent, recording its worst session in nearly a week.

JD Sports Fashion gained 9.7 per cent to hit a record high after Britain’s largest sportswear retailer reported record earnings for the first half on robust demand for sneakers and sportswear.

Among individual stocks, Portmeirion added 9.7 per cent as the homewares retailer plans to resume dividend payouts this year after reporting record revenue.

Ocado Group fell 1.4 per cent after its joint venture, Ocado Retail, posted a 10.6 per cent fall in revenue in its latest quarter.

Europe

European stocks ended flat, with miners and banks again, along with luxury stocks, leading declines as optimism over cooling US inflation growth in August proved to be short-lived.

The region-wide Stoxx 600 index inched 0.01 per cent lower, with the basic resources sector index dropping 1.9 per cent and banks sliding 1.1 per cent.

Luxury stocks, including LVMH, Kering, Richemont and Burberry, fell between 1.9 per cent and 3 per cent, tracking moves in Asia on concerns about the spread of Covid-19 cases in China.

Home to many luxury names, France’s CAC 40 fell 0.4 per cent. Still, many strategists expect European equities to outperform this year due to relatively high rate of vaccinations and catch-up trade in cheaper segments of the market such as banks and energy.

Pandora, the world's largest jewellery maker, rose 6.8 per cent after it boosted its earnings target for the coming years and lifted its share buyback plan.

Dutch specialty chemicals maker DSM hit a record high after it said it was weighing the sale of its materials division. Danish brewer Carlsberg fell 3.5 per cent after a double downgrade to "sell" by Berenberg.

New York

The Dow Jones and S&P 500 indexes fell, dragged down by financial stocks after data showing a slower-than-expected rise in US inflation led to uncertainty over the US Federal Reserve’s timeline to taper monetary stimulus.

US stocks have struggled this month as investors worry about the economic recovery amid a surge in cases of Covid-19’s Delta variant and the valuation of equities following a lengthy rally.

Among individual stocks, CureVac fell nearly 5 per cent after the German biotechnology firm cancelled manufacturing deals for its experimental Covid-19 vaccine with two prospective partners, after rivals with approved shots boosted production. (Additional reporting: Agencies)