Irish stocks were caught in the crossfire on Friday as investors reduced their holdings amid growing fears of an economic slowdown later in the year.
European stocks slipped 1.6 percent as recession warnings from two major global financial institutions and bets of a big US Federal Reserve rate hike next week rocked sentiment.
The declines sent the continental Stoxx 600 into its worst week in three months, down 2.9 percent. It is down 1.7 percent so far in September and is heading for its second straight monthly decline as investors fret over rising prices and an energy crisis in the region.
The Iseq index of Irish shares fell 2.2 percent on the day to end the week down 5.5 percent.
Global Irish big caps such as CRH, Kerry, Smurfit Kappa and Flutter, owners of Paddy Power, were the biggest losers.
The Bank of Ireland, which rallied sharply last week in response to the European Central Bank’s rate hikes that will improve its bottom line, fell 5.5 percent yesterday amid talk of a global recession
The World Bank said late Thursday that the global economy could be headed for recession as central banks aggressively tackle stubborn inflation. The International Monetary Fund said it expects a slowdown in the third quarter.
“(The World Bank) highlighted this because the new tightening policies are synchronized across a number of countries,” Sophie Lund-Yates, senior equities analyst at Hargreaves Lansdown, wrote in a note.
“The impact of these interest rates could be amplified and amplified, leading to a sharper-than-expected slowdown in global growth.”
All eyes are now on the Federal Reserve, where Chair Jerome Powell is expected to deliver a third 75 basis point hike of the year this year after 225 basis points of hike so far in 2022. Britain’s FTSE 100 index fell 0.6 percent after data showed Retail sales fell much more than expected in August, another sign the UK economy is slipping into recession. But the export-heavy index fell the least across Europe as sterling weakened.
Additional coverage from Reuters
https://www.independent.ie/business/irish-stocks-caught-in-sell-off-as-fears-of-recession-keep-building-41995642.html Irish stocks sold off as recession fears continue to mount