Shares fall as ECB points to rates cuts

• Published date: 12 April 2024
• Author: LAURA SLATTERY
• Publication title: Irish Times (Dublin, Ireland)

Europe’s benchmark stock index fell to a one-month low yesterday as banks took a hit after the European Central Bank (ECB) held rates steady but signalled imminent cuts, while Deutsche Telekom dropped to a five-month low after trading without entitlement to a dividend

The ECB maintained interest rates at a record high as expected, but signalled it may soon start to cut them, although investors questioned whether stubborn US inflation rates would stop the Federal Reserve from following close behind.

DUBLIN The Iseq index closed 1.6 per cent lower as bank stocks declined in line with the trend across Europe after the ECB hinted at interest rate cuts from June. Bank of Ireland shed 2.6 per cent to close at €9.82, while AIB finished 3.3 lower at €4.83.

Ryanair was also a drag on the index, easing back 3.3 per cent to €20.84, having advanced 1.1 per cent in the previous session.

Kingspan edged 0.5 per cent lower to €83.20, but Kerry Group was among the climbers, posting a 2.75 per cent gain in the session to close at €80.35. Packaging group Smurfit Kappa rose 1.1 per cent to €41.65.

LONDON The UK’s FTSE 100 edged 0.5 per cent lower as investors awaited Britain’s economic figures for hints on the path of domestic monetary policy after the ECB indicated it may soon start to cut rates.

British banking and insurance stocks fell the most, echoing a weak mood among European financial stocks. The UK banks index fell 2.7 per cent, recording its biggest percentage drop in almost two months.

Several heavyweights including Aviva, Lloyds Banking Group and Reckitt Benckiser also fell as they traded without entitlement for dividend.

EUROPE The pan-European Stoxx 600 closed 0.4 per cent lower in volatile trade, with the banking sector taking the biggest hit, falling 2.4 per cent and notching its steepest one-day drop in over eight months.

The indexes of...