Markets

Europe worries as Wall Street pushes ahead on benign inflation data

Indices in Europe end last full trading week with losses as Washington again battles to stop government shutdown

Stocks in Europe were hit as Novo Nordisk dropped 20.8 per cent on disappointing drug trial results. Photograph: Daniel Roland/AFP via Getty Images
Stocks in Europe were hit as Novo Nordisk dropped 20.8 per cent on disappointing drug trial results. Photograph: Daniel Roland/AFP via Getty Images
Fiona Keeley
Fri Dec 20 2024 - 18:43

The last full trading week of 2024 saw markets on either side of the Atlantic taking very different views.

Wall Street stocks rose sharply higher and the dollar softened as cooler-than-expected inflation data helped investors look past the looming possibility of a government shutdown and fresh tariff threats from US president-elect Donald Trump.

But that prospect of a shutdown weighed on European markets, along with concerns that central banks may not cut interest rates as quickly as hoped.

Dublin

The Iseq Overall Iseq Index closed down 0.18 per cent on Friday at 9,685.54 for a loss of 1.46 per cent over the week. Dalata Hotels rallied at the end of a turbulent session to close 0.44 per cent stronger on the day at €4.58.

READ SOME MORE

Financials AIB and Bank of Ireland were among the most actively traded stocks on the exchange but neither could make any ground, with AIB giving up 1.34 per cent to €5.16 and Bank of Ireland slipping 0.7 per cent to €8.66. PTSB fared worst of the lot, albeit in light trade, giving up 3.75 per cent to end the week on €1.41.

Property shares bucked the general trend with housebuilder Cairn Homes rising 2.62 per cent to €2.35 and Glenveagh Properties adding 1.02 per cent to €1.58. Landlord Ires Reit was 1.47 per cent firmer on just shy of 90 cent.

In terms of percentage gains, Greencoat Renewables fared best, up 3.12 per cent to 82 cent.Elsewhere, Ryanair edged 0.1 per cent higher to €19.26, Kingspan was down 0.28 per cent to €70 while Kerry inched 0.05 per cent down to €92 a day after shareholders back its reorganisation plans.

London

London trade finished on a bum note with the FTSE 100 dropping 0.3 per cent to end the week 2.6 per cent in the red, its biggest weekly loss since October 2023.

Financial companies were the biggest weights on the benchmark index, with banks off 0.5 per cent and non-life insurers down 0.7 per cent. Energy companies lost 0.3 per cent, tracking oil prices that fell on demand growth concerns.

Real-estate investment trusts rose 1.2 per cent to lead sectoral gains, followed by precious-metal miners after the bullion’s price rose over 1 per cent.

London-listed shares of Carnival were up 3.6 per cent after the cruise ship operator forecast strong bookings for 2025.

Europe

European stocks slid, setting a course for their worst week in three months as Mr Trump’s comments about potential tariffs on the European Union spooked investors.

The pan-European Stoxx 600 index closed 0.9 per cent lower, having been down as much as 2 per cent during the session.

Novo Nordisk didn’t help, plunging 20.8 per cent after the Danish drugmaker revealed disappointing results in a late-stage trial for its experimental next-generation obesity drug CagriSema, and wiping as much as $125 billion off its market value.

The broader healthcare subsector dropped 4 per cent, while the Danish benchmark tumbled 13.2 per cent to its weakest close since August 2023.

While most Stoxx subsectors fell, property was a rare bright spot with a 1.4 per cent advance.

New York

Wall Street’s main indices were higher in volatile trading with the Dow Jones up 1.38 per cent, the S&P 500 1.31 per cent higher and the Nasdaq also 1.3 per cent ahead.

Healthcare led gains as Novo Nordisk’s woes were good for Eli Lilly, which advanced 5 per cent. .

Latest data showed the Fed’s preferred gauge of inflation, the personal consumption expenditure index, rose 2.4 per cent in November on an annual basis, below estimates of 2.5 per cent, according to economists polled by Reuters.

After the data, traders raised their bets on interest rate cut for 2025, now expecting the first one in March and then again by October. Before the data, traders saw an about 50 per cent chance of a second rate cut by December 2025. – Additional reporting: agencies

  • Sign up for the Business Today newsletter and get the latest business news and commentary in your inbox every weekday morning
  • Opt in to Business push alerts and have the best news, analysis and comment delivered directly to your phone
  • Join The Irish Times on WhatsApp and stay up to date
  • Our Inside Business podcast is published weekly – Find the latest episode here
Business Today

Business Today

Get the latest business news and commentary from our expert business team in your inbox every weekday morning