Business

Muted day on Irish markets following ECB interest rate cut

More cuts on the way while Bundesbank warns region’s largest economy will barely grow next year

Germany faces another year of economic stagnation, the Bundesbank warned on Friday. Photograph: iStock
Germany faces another year of economic stagnation, the Bundesbank warned on Friday. Photograph: iStock
Fiona Keeley
Fri Dec 13 2024 - 18:52

European Central Bank policymakers said more interest-rate reductions are on the way. Data published on Friday showed euro-zone industrial-production flatlined in October – a bad omen for the final quarter of 2024. There were also gloomy projections from the Bundesbank, which reckons the region’s biggest economy will hardly grow in 2025.

European stocks slipped, taking the main benchmark to its first weekly decline in three while Wall Street’s main indexes were muted in choppy trading as yields on government bonds ticked up.

Dublin

The overall Iseq index was down 0.12 per cent finishing at a value of €9815. Origin Enterprises rose 4.15 per cent to €3.01. Kingspan fell 1.63 per cent to €69.60. Shares in healthcare group Uniphar rose 2.94 per cent to €2.10. Housebuilders Cairn Homes fell 1.48 per cent to €2.33. Glenveagh Properties fell 1.59 per cent.

AIB climbed 0.94 per cent to €5.39 a share, Bank of Ireland rose by 0.14 per cent to €8.77 and Permanent TSB was up 1.01 per cent to €1.49 a share.

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London

The FTSE 100 was down 0.1 per cent, but eked out gains for a fourth week after data showed a surprise contraction in the country’s gross domestic product in October.

Britain’s economy shrank for a second month in a row in October in the run-up to the government’s first budget – the first back-to-back declines in output since the onset of the Covid-19 pandemic in early 2020.

Gross domestic product contracted 0.1 per cent month-on-month in October, as it did in September, whereas economists polled by Reuters had forecast a monthly expansion of 0.1 per cent.

Precious metal miners led sectoral losses, falling 3.1 per cent, while industrial miners fell 2 per cent, tracking copper prices that came under pressure from a stronger dollar.

UK beverage stocks led the sectoral gains, rising 2.1 per cent, as spirit maker Diageo extended its rise from the previous session and added 2.3 per cent.

Endeavour Mining extended its losses from the previous session and fell 3 per cent to the bottom of the FTSE 100.

Wizz Air declined 5.7 per cent after RBC cut the target price on the airline firm to 2,500p from 2,700p.

Europe

The pan-European Stoxx 600 index lost 0.5 per cent to hit a more-than one-week low and ended the week about 0.8 per cent lower.

Healthcare stocks were among top sectoral decliners, with Novo Nordisk’s 3.9 per cent drop, weighing the most on Stoxx 600. On the flip side, insurers rose 1.2 per cent and led sectoral gains as Munich Re climbed 5.5 per cent after saying that it is targeting €6 billion in net profit for next year, with its reinsurance business alone anticipated to make up €5.1 billion.

France’s Cac 40 slipped 0.1 per cent as investors assessed whether a new government led by Francois Bayrou can tackle France’s fiscal problems. In Germany, the Dax index was down 0.1 per cent.

Stock markets have been choppy this week as investors digested stimulus updates from China, inflation data from the US and euro zone as well as the ECB’s fourth rate cut of the year on Thursday. Four of its policymakers backed further interest rate cuts on Friday provided inflation settles at the ECB’s 2 per cent goal as expected.

New York

Wall Street’s main indexes were muted although an upbeat forecast from Broadcom kept alive the euphoria around artificial intelligence.

Broadcom forecast quarterly revenue above Wall Street estimates and predicted booming demand for its custom AI chips in the next few years, sending its shares up nearly 19 per cent. This also helped the company cross a market capitalisation of $1 trillion for the first time.

Chip stocks were mixed, with Broadcom rival Marvell Technology rising 8.4 per cent, while AI bellwether Nvidia reversed gains and was last down 2.8 per cent. Yet a gauge for semiconductor stocks added 2.3 per cent.

Technology stocks have rallied recently, propelling the Nasdaq above the 20,000 mark for the first time on Wednesday. An in-line inflation reading cementing a 0.25 per cent interest rate cut from the Federal Reserve next week added to the momentum. – Additional reporting: agencies

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