European shares drift after German inflation data

European shares closed below their intraday highs on Monday after Germany reported higher-than-expected inflation. The Stoxx 600 lost some steam after five straight months of gains, amid high interest rates, continued Middle East tensions and uncertainty about the European Central Bank’s policy outlook weighed on sentiment.

Dublin

The Iseq Overall Index of shares closed marginally lower, ending the day off 0.13 per cent. The Dublin market was dragged lower by weaker banking shares and a decline in some building stocks, leaving the market falling behind the wider European trends.

AIB and Bank of Ireland both closed the day lower, with the latter shedding 0.25 per cent from its stock price, and AIB declining by 0.41 per cent.

Insulation specialist Kingspan was down almost 3 per cent by the closing bell, while homebuilders Cairn Homes and Glenveagh both ended the day slightly lower.

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Packaging giant Smurfit Kappa was one of the winners of the day, adding more than 2 per cent to its share price over the session to finish at €40.88.

London

A stronger session for miners and financial services stocks helped lift the FTSE 100 higher at the start of the week. It moved 7.2 points higher, or 0.09 per cent, to close at 8,147.03, the latest record-high closing price for the index.

In company news, shares in Hipgnosis Songs Fund edged higher as the bidding battle for the music royalties fund stepped up a gear. Hipgnosis said it has agreed to a $1.6 billion (€1.5 billion) takeover by US private equity giant Blackstone, which trumps rival suitor Concord’s £1.2 billion (€1.4 billion) bid that was tabled last week.

Elsewhere, Anglo-American was among the biggest risers of the day amid speculation that a potential buyer was weighing up an improved bid for the mining giant. Anglo-American last week said it had rejected a takeover proposal by Australian rival BHP, which would have created the world’s largest copper miner.

But reports on Monday suggested that BHP was considering raising its offer, helping lift shares in Anglo-American 4 per cent higher.

Europe

The pan-European Stoxx 600 closed up 0.1 per cent, after logging its first weekly gain in four weeks on Friday. Germany’s DAX slipped 0.3 per cent after German preliminary data, ahead of Tuesday’s euro zone release, showed national inflation rose slightly in April due to higher food prices and a smaller drop in energy prices than in previous months.

Meanwhile, Philips surged 29 per cent as the Dutch firm announced a smaller-than-expected figure for claims over its recalled breathing devices in the United States. The news ended the uncertainty that had slashed its market value in the past three years.

On the flip side, Deutsche Bank fell 8.6 per cent as the lender reported a legal provision it will make over a litigation regarding its takeover of Postbank was set to hurt its second-quarter and full-year profitability.

New York

Wall Street’s main indexes crept higher in volatile trading on Monday as shares of Tesla and Apple advanced, while investors exercised caution ahead of the Federal Reserve’s interest rate decision later in the week.

Tesla shares shot up nearly 14.5 per cent, driving a 1.6 per cent rise in the consumer discretionary sector, after the electric vehicle maker cleared some key regulatory hurdles that had long hindered the roll-out of its self-driving software in China, its second-largest market.

Apple added 3.1 per cent after a report that the iPhone maker had renewed discussions with OpenAI about using the startup’s generative artificial intelligence (AI) technology. Bernstein upgraded the stock to “outperform”.

Offsetting the optimism, the communication services sector lost 1.7 per cent, dragged by Alphabet and Meta Platforms shedding more than 2 per cent each.

On the earnings front, Domino’s Pizza jumped nearly 5 per cent after topping Street expectations for first-quarter same-store sales. - Additional reporting: Reuters

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