European shares fell on Friday, as hawkish commentary from US policymakers dampened expectations of an imminent interest rate cut, and investors fretted about whether the UK can balance its public finances.
The pan-European Stoxx 600 ended down 1 per cent to 574.81 points, with banks down 2.4 per cent.
Macro developments in the US have been in the spotlight this week and investors were hopeful that the resumption of data releases would point to a weaker economy and give the Federal Reserve reason to lower borrowing costs in December.
However, those expectations were pared after a growing number of Fed policymakers signalled caution on further easing.
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DUBLIN
The Iseq All-Share index ended the session down 1.4 per cent at 12,365.36.
Banks were mixed. PTSB rose 0.6 per cent to €3.19 as the lender said it had sold off a non-performing portfolio of loans, which will free up some expensive capital in reserve.
The Irish Times also reported that AIB had agreed a loan sale, after European markets closed. AIB lost 1.5 per cent to €8.57. Bank of Ireland dipped 0.5 per cent to €51.72.
Kenmare Resources was a rare bright spot, rising 5.9 per cent to €3.22.
LONDON
UK stocks tumbled on Friday, with the FTSE 100 dropping 1.1 per cent, as bond yields surged following reports that the UK Government had abandoned plans for income tax hikes in the upcoming budget.
According to reports, UK chancellor of the exchequer Rachel Reeves has abandoned plans to raise income tax in this month’s budget, a decision that has severely undermined investor confidence in the government’s ability to meet fiscal targets. This uncertainty propelled bond yields higher.
The market turmoil extended across asset classes, with the sterling weakening by nearly a quarter of a per cent while stocks experienced a sharp, widespread decline.
Heavyweight banking stocks led the losses with Barclays sliding 3.1 per cent and NatWest falling 3.6 per cent.
The aerospace and defence sector fell with engineering firm Rolls-Royce declining 1.7 per cent for the second straight session. Melrose Industries edged 0.5 per cent lower, after the GKN Aerospace owner maintained its full-year guidance.
Commercial property firm Land Securities reported a drop in property valuations in the first half of its fiscal year, sending its shares down 4.6 per cent.
EUROPE
Data showed the euro zone economy continued to expand at a modest but respectable pace in the third quarter while the trade surplus surged in September on healthy exports to the US.
Swedish energy solutions group Nibe Industrier declined 12.9 per cent after reporting third-quarter results, while Danish vaccine maker Bavarian Nordic lost 5.7 per cent after it narrowed its 2025 revenue outlook and its chair Luc Debruyne said he would step down.
Bucking the day’s trend, luxury group Richemont gained 5.9 per cent and lifted the broader luxury sector after reporting quarterly sales well ahead of forecasts.
Siemens Energy jumped 9.4 per cent after the German company announced plans to pay its first dividend in four years and raised its midterm outlook.
NEW YORK
Wall Street’s main indexes were ahead in early afternoon trading, having been under water earlier in the session.
Worries about stretched artificial intelligence (AI) stock valuations have led to several bouts of sell-off in recent weeks. The Nasdaq is poised for a second consecutive week of losses.
Applied Materials shares dropped after the company flagged expectations of weaker China spending next year on tighter US export control curbs. Most semiconductor-linked stocks fell.
Megacap technology stocks were lower. Meanwhile, a growing number of Federal Reserve policymakers signalled reticence on further rates easing.
Walmart fell after announcing that chief executive Doug McMillon would retire next year.
Warner Bros Discovery gained. The entertainment company said it had amended CEO David Zaslav’s employment agreement amid a strategic review of its business. – Additional reporting, Reuters
