World stocks tumble amid concerns about interest rate hikes

World stocks tumbled again on Tuesday amid concerns about the chance of more interest rate hikes in Europe and the United States, after data showed economic growth and inflation have stayed resilient in both regions despite the policy tightening so far.

Dublin

Euronext Dublin finished the day down marginally but outperformed some of its international peers as the banks lifted the index.

Bank of Ireland and AIB were both up 5-6 per cent earlier in the day before each closed up 3 per cent. “There is a lot of commentary around interest rates, and so on, and that is good for the financials,” noted a trader in Dublin. “Those two probably outperformed the sector a little bit.”

In the tourism and hospitality sector, low budget airline Ryanair was up almost 1 per cent, while Dalata — the largest hotel operator in the State — was up 1.5 per cent in advance of results on Wednesday.

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Elsewhere, packaging company Smurfit Kappa ended the day up 2.5 per cent, albeit on small volume, while insulation specialist Kingspan was flat.

On the downside, building materials giant CRH finished the day down 1.5 per cent, while Paddy Power Betfair parent Flutter Entertainment was also weaker. Kerry Group ended the day down 1.3 per cent.

London

The FTSE 100 slid lower as early positivity was erased by a downbeat opening on Wall Street.

Traders came back from the bank holiday break in high spirits but saw commodity firms and healthcare stocks come under heavy pressure from broad weakness in the US markets. London’s top flight ended the day down 0.88 per cent.

In company news Bunzl shares finished firmly in the red despite the distribution and outsourcing business raising its profit margin forecast.

Sentiment drifted after the company — which supplies department stores and hospitals around the world with coffee cups and food labels — said inflation became “more widespread” across the business over the first half of 2022. It closed 191p lower at 2,924p.

Elsewhere, technology business Bango saw shares rocket after snapping up the global payment business of Japanese mobile phone operator NTT Docomo. Bango finished the session 36p higher at 192p.

Manchester-based construction firm Kier Group moved higher after analysts at Peel Hunt argued it is well positioned to deliver long-term growth and a sustainable dividend. It was up 1.7 per cent at 72.1p at the close.

Europe

German inflation rose to its highest level in almost 50 years in August, beating a high set three months earlier, and strengthening the case for the European Central Bank to go for a larger rate hike next month.

The pan-European Stoxx index gave up earlier gains to end the day down 0.7 per cent, and MSCI’s world equity index fell 0.8 per cent.

The two-year Treasury yield climbed to a new high of 3.5 per cent, its highest since late 2007, and well above benchmark 10-year yields, which also rose, but only to 3.1 per cent.

Germany’s 10-year yield rose to 1.5 per cent, close to the two-month high reached on Monday of 1.5 per cent.

The German Dax improved 0.54 per cent by the end of the session. Meanwhile, the French Cac finished 0.13 per cent lower.

New York

Wall Street’s main indexes fell as a sharp rise in job openings added to worries about the Federal Reserve’s aggressive approach to bring down inflation.

The benchmark S&P 500 index has slumped 4.6 per cent since Fed chair Jerome Powell last week reaffirmed the central bank’s determination to raise interest rates despite a slowing economy.

Rate-sensitive megacap growth and technology stocks such as Microsoft, Apple and Nvidia, fell between 0.6 per cent and 1.1 per cent.

The Dow Jones Industrial Average was down 0.58 per cent; the S&P 500 was down 0.71 per cent; and the Nasdaq Composite was down 0.72 per cent.

Twitter dipped 1 per cent as Tesla chief Elon Musk sent an additional notice to terminate the $44 billion deal to acquire the social media company.