Shares tumble as government bond rout deepens on rising oil prices
Equities tumbled across the globe on Thursday with investors turning risk-averse amid soaring government borrowing costs. A rally in oil prices sparked a fresh sell-off in sovereign bonds, catapulting US bond yields to their highest levels since 2002. Dublin The Iseq underperformed its European peers, falling by almost 3 per cent as index heavyweights were caught up in the wave of selling that spread through markets. Across the board, financials were weaker, with Bank of Ireland , which traded ex-dividend on Thursday, falling by 3.5 per cent. AIB was off by 3.7 per cent, finishing the session at €11.10 per share. Glanbia tumbled another 5 per cent to €18.66 per share. The stock, which is still up by more than 36 per cent over 12 months, has faced some selling pressure since Bank of America rated it “underperform” last week. Most of the big names on the index finished in the red, with Kerry Group , Ryanair and Kingspan down by between 1.3 per cent and 2.3 per cent. London UK share indices fell, dragged down by banks as the British government’s 30-year borrowing costs hit highs not seen since the late 1990s. The benchmark FTSE 100 dropped by 1.7 per cent, while the domestic-focused FTSE 250 shed 1.6 per cent. All the big names in British lending slid, with NatWest sliding by 6.1 per cent. HSBC and Lloyds gave back 4.5 per cent, and Barclays fell by 4.1 per cent. The falls in UK bank stocks gathered pace after Sky News reported the heads of Britain’s major lenders, including those for Barclays, HSBC and Lloyds, had been summoned to a meeting next week with finance minister John Healey in advance of this month’s budget, as expectations build for possible taxes on banks in the Autumn Budget on October 28th. Energy stocks, meanwhile, advanced, with oil majors Shell and BP ahead by 0.6 per cent and 1.7 per cent respectively, tracking rises in global crude prices. Europe Starting the fourth quarter on shaky ground, European shares slid, with the Stoxx 50 down by 1.5 per cent and the cross-Continental Stoxx 600 down by 1.1 per cent. Banks led sectoral losses as investors turned risk-averse, with global Government bond yields hitting multiyear highs. French shares took a hit after its government unveiled a 2027 budget with €43 billion in cuts and tax increases. The Cac 40 fell by more than 1.5 per cent, with Paris-listed luxury goods groups Hermes and LVMH falling by around 2 per cent. BNP Paribas tumbled by 3.6 per cent. Its Spanish peers, Santander and BBVA, fell by around 4 per cent, while Dutch lender ING was down by just under 4 per cent. In line with global trends, tech shares were a rare bright spot on European bourses. German software giant SAP added 1.2 per cent, while chipmakers ASML and Infineon were flat. New York Wall Street’s main indexes slipped on Thursday as a deepening bond sell-off drove US treasury yields to multi-decade highs, outweighing gains in software stocks. Global bond markets came under renewed pressure, with the yield on the benchmark 10-year treasury note touching 5.3445 per cent, its highest since 2002, a day after treasuries logged their worst quarter since 1994. Technology was a rare area of strength, with software shares rallying on results from Accenture, which climbed 22 per cent after the consulting firm forecast full-year revenue growth above estimates. Rival Cognizant climbed 10 per cent, while blue-chip IBM gained 4.2 per cent. Micron Technology’s better-than-expected revenue forecast and $32 billion (€28 billion) customer commitments under its supply agreements reinforced faith in the AI trade. Micron shares, however, slipped about 0.9 per cent after nearly quadrupling this year. – Additional reporting: Bloomberg, Reuters