European shares fall as oil prices and interest rate expectations climb
European shares fell on Wednesday as crude oil prices and market interest rates – or yields – climbed as investors assessed the latest developments from the US-Iran talks to end the Middle East conflict ahead of a high-stakes Washington-Beijing summit. Iranian president Masoud Pezeshkian said at the United Nations that Tehran would never surrender to the United States, but still believes in diplomacy, a day after US president Donald Trump threatened to “annihilate” Iran. Investors also stuck to the sidelines as Trump prepared to meet Chinese president Xi Jinping in Washington on Wednesday ahead of substantive talks on Thursday. Tensions over trade, technology and Tehran are set to play out against a backdrop of pomp and ceremony. The pan-European Stoxx 600 index ended the session down 0.4 per cent at 639.92. Dublin The Iseq All-Share index lost 0.8 per cent to 14,332.16. Ryanair stood out as a weak spot, falling 1.1 per cent to €23.20, as oil prices advanced. Banking stocks outperformed, with AIB rising 0.1 per cent to €11.63 and Bank of Ireland dipping only 0.3 per cent to €19.90, as they are seen benefiting from a series of European Central Bank (ECB) rate rises over the next year. London The FTSE 100 ended little changed, as oil price strength lifted BP and Shell , up 2.8 per cent and 2 per cent respectively. BP received a further boost as JP Morgan upgraded the oil major to the equivalent of a buy. Analyst Matthew Lofting noted BP’s recent history has been “chequered” with “operational inconsistencies, strategic inconsistencies and a balance-sheet poison pill”. Leading the fallers was JD Sports Fashion , down 5.7 per cent, giving back most of Tuesday’s gains. Autotrader fell 2.8 per cent after JP Morgan issued a cautious note on the company. On the FTSE 250, Pollen Street Group surged 13 per cent as the asset manager said it was considering strategic options, including the possibility of the group being taken over Europe Heavyweight bank stocks lost 0.4 per cent, while insurance and construction and materials were the biggest percentage decliners, down 1.7 per cent and 1.3 per cent respectively. The moves come after global markets rallied sharply earlier this week. The Stoxx 600 is still 0.8 per cent higher this week, after marking declines for the last three weeks, as oil prices and bond yields rallied, and the European Central Bank delivered its second interest rate hike this year. Among individual stocks, Arcadis lost 2.9 per cent, after Canadian engineering firm WSP Global dropped its takeover bid for the Dutch consultancy and engineering firm. KWS shed 9 per cent after the German seed producer’s annual net sales fell 3 per cent to €1.63 billion, missing market expectations and hit by lower sugar beet and corn acreage. Shares of Adyen slipped 4.7 per cent after the Dutch payments processor named Klarna’s Niclas Neglen as its next chief financial officer. New York US shares were lower in early afternoon trading after market interest rates – or yields – on 10-year US government debt hit the highest level since 2007 as data showed that US business activity raced to a more than five-year high in September, fuelled by a surge in new orders. Yields have increased to multiyear highs as traders price in the likelihood of further Federal Reserve interest rate hikes with inflation remaining stubbornly above the US central bank’s 2 per cent annual target. Chip-related companies came under pressure, including AMD , Nvidia and Intel . Meta Platforms rose, building on its more than 13 per cent jump so far this week following strong reception of its AI assistant Muse, which analysts say could benefit tech infrastructure stocks, while also spurring AI disruption chatter in pockets of the market. Online travel-related companies, including Expedia , Airbnb and Booking Holdings , were among the biggest laggards on the S&P 500. On the earnings front, casual dining chain Cracker Barrel rose after beating fourth-quarter sales estimates. PayChex dropped after the HR and payroll services provider said that its largest segment missed first-quarter revenue estimates. – Additional reporting: Reuters, PA