European markets lose momentum amid sticky US inflation

European shares lost momentum on Thursday after hitting a series of record highs in the past few sessions, as further evidence of sticky US inflation led to doubts about the timing of interest rate cuts, while weakness in mining stocks added to declines.

US producer prices increased more than expected in February, fanning fears about a pickup in inflation and casting doubt on whether the Federal Reserve would be able to start cutting interest rates in June.

Meanwhile, European Central Bank policymakers continued to line up behind a June interest rate cut but on Thursday offered contrasting views on the timing and pace of further moves.

Dublin

The Iseq edged up 0.15 per cent. Packaging group Smurfit Kappa advanced again, closing up 1.5 per cent at €40.80, while food group Kerry closed 0.4 per cent higher at €81.64. Origin Enterprises posted a 4.8 per cent climb, finishing at €2.93.

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It was also a good session for Kingspan, which rose 1 per cent to €84.00.

But Ryanair nudged down 0.2 per cent to €19.84, while Bank of Ireland declined 1 per cent to €8.76.

London

The FTSE 100 closed 0.4 per cent lower, pulling back from the previous day’s nine-month peak, though housing-related stocks outperformed the broader market, led by Vistry shares that hit a more than two-year high. The housebuilder advanced 8.2 per cent after it said it would build more homes this year, encouraged by resilient demand after its 2023 profit beat market expectations.

The more domestically oriented FTSE 250 slipped 0.4 per cent, led by a 16 per cent tumble in OSB Group after the bank said its 2024 profit margins would be broadly flat year-on-year due to rising funding costs and a subdued mortgage market.

Trainline jumped 13 per cent after the rail ticketing company raised its adjusted earnings forecast for the full year.

Shares in Anglo American fell 5.3 per cent, while those of NatWest Group dropped 5.1 per cent as they traded without entitlement for dividends.

Deliveroo added 2.4 per cent after the meal delivery firm reported better-than-expected core earnings and said it expects to generate positive cash flow.

Europe

The pan-European Stoxx 600 closed 0.2 per cent lower, after notching an all-time peak for the third time in a row earlier in the session.

European bond yields rose, with Germany’s 10-year yield, considered a benchmark for the euro zone, touching its highest level since March 1st.

Embracer agreed to divest selected assets from its subsidiary Saber Interactive, thereby ceasing all operations in Russia. Shares of the Swedish gaming company reversed early gains to drop 11.2 per cent.

Shares of Grifols fell 9.3 per cent after credit ratings agencies Fitch and S&P downgraded their ratings for the beleaguered Spanish drug maker.

On the upside, Encavis shares skyrocketed 25.2 per cent after private equity firm KKR launched a €2.8 billion euro takeover offer for the German electricity and energy producer.

France’s blue-chip index outperformed other major European bourses to end up 0.3 per cent.

US

Wall Street’s main indexes slipped after hotter-than-expected producer prices data likely muddied bets around the timing of the Federal Reserve’s first rate cut and high-flying chip stocks extended their losses.

Most mega-cap growth and technology stocks inched higher, but artificial intelligence giant Nvidia fell 3.6 per cent.

Tesla slid 3.7 per cent after analysts at UBS cut the electric vehicle maker’s price target and lowered its first-quarter delivery forecast.

Shares of Robinhood Markets advanced 6.5 per cent after the trading app operator said its assets under custody rose 16 per cent in February.

Aerospace and defence company RTX gained 1.6 per cent after Wells Fargo upgraded its rating to “overweight” from “equal weight”.

Additional reporting: Reuters

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