European stocks tumbled on Thursday, with the benchmark Stoxx index racking up its biggest one-day loss since early November, putting it on course for its biggest percentage drop in five weeks
Investors fled riskier assets including equities and commodities after the US Federal Reserve signalled a slower pace of interest rate cuts next year.
The Fed cut rates as expected on Wednesday after the close of European markets, but chairman Jerome Powell said more reductions in borrowing costs now hinge on further progress in lowering stubbornly high inflation.
Dublin
The Iseq fell 0.3 per cent, recovering some of its losses over the course of the session, as investor sentiment improved after a strong opening on Wall Street.
Building materials group Kingspan fell 1 per cent to €70.20, while AIB dropped 0.8 per cent to finish at €5.23.
Several key stocks bucked the negative trend, with Kerry climbing 0.3 per cent to €92.05 as investors voted on the sale of its milk processing business and Bank of Ireland posting a 0.9 per cent rise to finish the day at €8.67. Ryanair, meanwhile, closed flat at €19.24.
London
London stocks were largely in the red at the start of trading and remained weak despite the Bank of England holding interest rates at 4.75 per cent.
The blue-chip FTSE 100 finished 93.79 points, or 1.14 per cent, lower. The domestically-focused FTSE 250 mid-cap index was also down 1 per cent, while a stronger sterling and a spike in British gilt yields also kept UK equities under pressure.
Water firms Severn Trent and Pennon both made gains after industry regulator Ofwat said firms could increase customer bills by more than previously expected. The move helped Severn Trent shares increase by 0.9 per cent while Pennon was up 0.3 per cent.
Outsourcing firm Serco lifted in value after it said it has seen strong momentum over the second half of 2024 on the back of rising orders. As a result, shares in the company moved 8.4 per cent higher, making it the top performer among a handful of stocks in the FTSE 250 posting advances
Diageo shares ticked slightly higher after reports the spirit giant is exploring a sale of its Ciroc vodka brand, once backed by music mogul Sean “Diddy” Combs.
Europe
The benchmark Stoxx recorded its biggest single-day drop since early November as investors fled riskier assets. The pan-European Stoxx 600 index closed 1.5 per cent lower, hitting a three-week low, with all the major sub-sectors in the red.
German stocks recorded their fifth consecutive day of losses as the Fed decision offset any positivity around stronger-than-expected consumer confidence data. The Dax index was down 1.2 per cent as was France’s Cac-40.
Rate-sensitive technology stocks came under heavy selling pressure after mega-cap giants suffered big losses overnight on Wall Street. Chip stocks including ASML, Infineon Technologies and STMicroelectronics fell between 3.7 per cent and 6.2 per cent, also hurt by US firm Micron Technology’s bleak quarterly forecast, while a volatility gauge for euro zone stocks jumped to its highest in two weeks.
SoftwareOne Holding jumped about 7 per cent after the Swiss technology firm announced a deal to buy Crayon Group that valued its Norwegian competitor at around $1.34 billion. Crayon’s shares fell 4.1 per cent.
New York
Wall Street’s main indices broadly rose at the open on Thursday
as investors grew accustomed to the reality that the central bank will take a slower, more measured approach to policy-easing in the coming year.
Bank stocks rose 1.3 per cent as a rise in yields improves the profitability of lenders, while mega-cap and growth stocks recovered some ground, with Nvidia adding 3.2 per cent and Amazon.com gaining 2.1 per cent. – Additional reporting: Reuters
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