Borrowing costs and rising oil prices dampened any gains on the European and US markets in the final session of the week. The Iseq index closed marginally higher as markets prepared for a holiday weekend in the US and UK.
Meanwhile, potential political turmoil in Spain and Italy rocked Europe’s markets.
Traders said the trade was generally quiet but noted big volume in Bank of Ireland stock, which closed flat at €7.43. A block of 5.37 million shares, or 0.5 per cent of the company, changed hands at €7.40.
Shares in AIB were marginally higher at €4.92, a rise of just under 1 per cent over the day.
Ryanair traded back towards recent highs on good volume, adding 1.2 per cent to finish at €16.72.
Meanwhile, Tullow Oil slipped more than 4.6 per cent as a decline in oil prices impacted stock. The stock ended the day at €2.71 amid speculation that Opec was set to increase output.
Irish packaging manufacturer Smurfit Kappa saw its stock climb to €35.44 a day after the company agreed to acquire Dutch paper and recycling business Reparenco for €460 million.
Also climbing was Paddy Power Betfair, which built on the previous session’s gains to add almost 2.2 per cent. It finished the session at €103.20. The company has agreed a merger of its US unit with the sports site FanDuel.
A slump in oil prices hit British majors on Friday, limiting the gains of the FTSE 100 benchmark index, while Kingfisher shone after Australia’s Wesfarmers said it would sell rival UK home improvement chain Homebase for just £1. The blue chip FTSE 100 ended the day up 0.18 per cent at 7,730.28 points but posted a weekly loss of 0.6 per cent, breaking an eight-week run of gains.
“The move lower in the oil market on account of speculation that Opec will raise output slightly has hit London-listed stocks like BP, Royal Dutch Shell and Tullow Oil, ” said David Madden, an analyst at CMC Markets UK. Index heavyweights BP and Royal Dutch Shell lost 2 per cent and 1.5 per cent respectively. Confirmation that Britain’s economy barely grew during the first quarter of 2018 added pressure to the pound on a five-month low as worries over Brexit continued to take their toll.
Borrowing costs in southern Europe shot up on Friday and stock markets in Milan and Madrid fell as threatened no-confidence motions against Spain’s prime minister exacerbated a sell-off provoked by growing political risk in Italy.
The Stoxx Europe 600 Index pared gains, dipping 0.1 per cent, with Spain’s benchmark gauge underperforming as the prospect of a snap election in that country increased. Core European bonds advanced, while Italy led peripheral debt lower as worries mounted over the leadership there and in Spain. Meanwhile, other global risks remain on the minds of investors. Spain’s biggest opposition party is ready to push for a no-confidence motion against prime minister Mariano Rajoy.
Spain’s Ibex was on course for its worst day since global market turmoil in early February. Bank stocks were the worst hit with the euro zone banks index down 1.9 per cent and also set for its biggest fall since early February. Nearly twice the average daily volume was traded in Spain’s Caixabank and Santander as well as in Italy’s Banco BPM and Intesa Sanpaolo .
The Cac 40 in France was 0.18 per cent lower, and the Dax in Germany was up 0.65 per cent towards the end of the week’s trading.
US stocks bounced between gains and losses as plunging oil prices rocked energy stocks and investors considered what US president Donald Trump called North Korea’s “warm and productive” response to his decision to cancel a summit with the nation’s leader Kim Jong-Un.
The S&P 500 Index and Dow Jones Industrial Average were lower on lighter than normal volume, but the Nasdaq benchmarks climbed as traders headed into the long Memorial Day holiday weekend. The S&P 500 was down 0.3 per cent to 2,720.83 as of 12.43pm in New York, while the Nasdaq 100 Index added 0.3 per cent.
The S&P 500 Energy Index sank more than 3 per cent after a Saudi minister said supply would likely be boosted in the second half.
On Thursday, stocks tumbled after president Trump scrapped his planned meeting with Kim Jong-Un because of what he called the “tremendous anger and open hostility” from Pyongyang. But then on Friday, the US president pivoted and said the meeting could happen next month. “The markets reacted negatively when Trump pulled out,” said Jeffrey Saut, chief investment strategist at Raymond James. “And then we got the little soothing news over night, so the market’s just adrift here until we get into next week when the players get back.” – Additional reporting: Reuters, Bloomberg, PATags: A, AIB, Banco Bpm, Bank of Ireland, BP, Business, CaixaBank, CMC, Equities, Homebase, Intesa, Markets, Opec, Royal Dutch Shell, Ryanair, Smurfit Kappa, Tullow Oil, Wesfarmers