European shares slip 1% compounding a difficult August

European shares slipped on Wednesday, clocking declines for the month as data showed euro-zone inflation in August hit another record high, while energy concerns intensified after Russia began halting gas flows to Germany on a key supply route.

Euro-zone inflation rose to another record high of 9.1 per cent this month from 8.9 per cent a month earlier, going higher than expectations and staying well clear of the European Central Bank’s 2 per cent target.

Adding to the recession concerns, Russia halted gas supplies via Europe’s key supply route Nord Stream 1, as the pipeline’s operator confirmed no gas was flowing on Wednesday morning for what is scheduled to be a three-day maintenance shutdown.

Dublin

The Iseq index beat the negative trend across Europe by posting a 0.5 per cent gain for the session, thanks in large part to a 2 per cent gain for Ryanair, which closed up at €12.34 a day after chief executive Michael O’Leary’s comments that a recession would be good for the airline’s chances of luring passengers from more expensive rivals.

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Bank of Ireland advanced 3.1 per cent to €6.16 and AIB was up 2.8 per cent at €2.27, with the market also lifted by a 1.8 per cent gain for Flutter Entertainment on a day when the owner of bookmaker Paddy Power also had a strong performance on its London listing.

Building materials group CRH was among the fallers, declining 1 per cent to €36.80 after comments by chief executive Albert Manifold about inflation in the sector, while Cairn Homes dropped 2.3 per cent to 99 cent.

London

The blue-chip FTSE 100 logged its worst daily performance in seven weeks, closing down 1.1 per cent amid warnings of even higher inflation in the coming months, which raised fears of a deep recession. The index slipped almost 2 per cent in a brutal August. The FTSE 250 mid-cap index slid 0.5 per cent on the day to log a monthly loss of 5.4 per cent.

There was some relief for Cineworld, which closed 44 per cent higher after the troubled cinema chain sought to clarify the identity of its largest shareholder following reports by the Financial Times that this had been recorded incorrectly in its annual report for the past year.

International Consolidated Airlines Group (IAG), the owner of Aer Lingus and British Airways, was one of the main climbers in the session, finishing up 1.7 per cent.

Europe

The continent-wide Stoxx 600 fell 1.1 per cent to new six-week lows, carrying its losing streak to a fourth straight day. Energy stocks tumbled 2.6 per cent, leading losses as oil prices continued to slide on recession fears.

The benchmark index clocked a monthly fall of 5.1 per cent in August on fears of hawkish central bank policies and escalating risks of recession and energy rationing in the region.

Among individual stocks, Italian bank UniCredit rose 4.5 per cent after saying the ECB had authorised a second share buyback worth up to €1 billion, while Italy’s Eni fell 3.5 per cent after saying it would receive lower volumes of gas from Russia’s Gazprom.

New York

US stock indices struggled for direction in early trading as investors worried how much the Federal Reserve will hike interest rates to tame inflation.

Chipmakers slid after Seagate Technology slashed its first-quarter earnings expectations, citing macroeconomic concerns that are forcing cloud companies and PC makers to cut inventory levels. Shares of Seagate dipped 2.9 per cent, while HP dropped 6.1 per cent after it forecast downbeat quarterly and full-year profit on slowing PC sales.

Snap rose 7.2 per cent after saying it would cut 20 per cent of staff, restructure its advertising sales unit and shut down some projects to focus on improving sales and the number of Snapchat users.

Bed Bath & Beyond slumped 20.8 per cent after saying it would close 150 stores, cut jobs and overhaul its merchandising strategy in an attempt to turn around its money-losing business. — Additional reporting: Reuters