European shares run out of steam as Bayer and energy stocks decline

European shares ended Thursday’s session little changed, after they pulled back from gains earlier in the session as German drugmaker and chemicals giant Bayer and energy stocks declined.

The index had risen by as much as 0.7 per cent earlier in the session on hopes of a pause in the US Federal Reserve’s interest rate hike campaign amid supportive economic data.

DUBLIN

The Iseq All Share index closed less than 0.1 per cent higher at 8,544.01. Banking stocks were out of sorts, with AIB off 1.4 per cent at €3.80, while Bank of Ireland lost 4.6 per cent to €8.88.

Insurer FBD edged 0.4 per cent higher to €12.95 as it signalled that it will soon come up with a plan on returning surplus cash to investors and that gross written premiums rose so far this year.

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Irish Continental Group lost 1.4 per cent to €4.60 as the Irish Ferries operator reported its revenue grew by 1.4 per cent in the first four months of the year to €163.4 million.

Cairn Homes added 1.7 per cent to €1.06 as it issued an upbeat trading statement on the day of its annual general meeting.

LONDON

The UK’s FTSE 100 share index ended virtually flat, although mining stocks fell as base metal prices slumped on China growth concerns.

The Bank of England (BoE) raised its bank rate for the 12th consecutive time but its decision had been expected and had little impact on the stock market.

Industrial metal miners slid 3.2 per cent, hitting an eight-month low as copper and other base metal prices dropped after China’s consumer prices rose at the slowest pace in more than two years in April, while factory gate deflation deepened.

The BoE raised its key interest rate by 0.25 of a percentage point to 4.5 per cent.

Europe’s largest bank HSBC and energy giant BP lost 1.2 per cent and 1.9 per cent respectively as they were trading without the entitlement for dividends.

Helping cut losses were gains in defensive stocks like healthcare major AstraZeneca and consumer staples company Unilever.

EUROPE

Among major movers, Bayer was the top Stoxx 600 laggard, logging its worst one-day fall of 7.5 per cent in almost two years, after warning that 2023 results could come in at the lower end of its target range, hurt by cost inflation and falling prices of glyphosate-based weedkillers.

Copper miners Glencore and Rio Tinto dropped 4 per cent and 2 per cent respectively on falling prices of the red metal.

On the flip side, Swedish real estate company SBB was the top Stoxx 600 gainer, rebounding 12.7 per cent on Thursday after a three-day slide of nearly 44 per cent.

Norwegian salmon farmer SalMar jumped 6.5 per cent after its first-quarter results.

NEW YORK

The Dow and the S&P 500 were lower in early afternoon trading, pressured by a drop in Disney shares after the company reported a fall in subscriber growth, while PacWest’s latest woes sparked another rout in the regional banking sector.

PacWest Bancorp plunged after it reported a drop in deposits last week and pledged an additional $5.1 billion (€4.7 billion) of its loans to the central bank.

The US Federal Deposit Insurance Corporation said about 113 of the country’s largest lenders will bear the cost of replenishing the $16 billion hit that the agency has taken due to the regional banking crisis.

The banking sector worries overshadowed data that showed US jobless claims jumped to a 1½-year high last week, pointing to widening cracks in the labour market, which together with subsiding inflation could allow the Federal Reserve to halt further interest rate increases next month.

Tapestry, the luxury fashion group, jumped as it raised its annual profit forecast. — Additional reporting: Reuters