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Markets slip amid indications of US interest rate rises

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Markets slipped on Tuesday as new US Federal Reserve chairman Jerome Powell indicated that he would raise interest rates gradually in the world’s biggest economy.

DUBLIN
Insurer FBD was the star performer after reporting that underwriting profits rose to almost €45 million last year from €3.2 million in 2016.

Shares surged 14.83 per cent to €12, a one-year high for the stock, following the news. Traders noted that volumes in the insurer’s shares were light.

Hotelier Dalata, owner of the Clayton, Maldron and Clarion chains, climbed 2.94 per cent. The group said that profits for 2017 jumped 75 per cent to €77.3 million.

Bank of Ireland gained 1.33 per cent to close at €7.64, making up ground that it lost on Monday after reporting results.

Rival AIB, also due to publish its 2017 numbers this week, inched up 0.19 per cent to €5.17 after close to four million of its shares changed hands.

Index heavyweight, CRH, fell 1.42 per cent to €27.73. The building materials giant is yet another Irish company scheduled to report results in coming days.

LONDON
Britain’s top share index closed down 0.1 percent, with Sky soaring 20.5 per cent to 1,300 pence sterling as investors priced in a possible bidding war for the company following Comcast’s surprise move.

Rival broadcaster ITV rose 1 per cent. The offer from the $184 billion US media giant could scupper the plans of Rupert Murdoch’s Fox to buy out Sky and sell it to Walt Disney.

Standard Chartered rose 1.2 per cent to 839p after it joined rival UK banks in resuming dividend payments as profits soared, though weaker than expected revenue kept investor exuberance in check.

Housebuilders gained after Persimmon announced a more than doubling of dividend payments, a 25 per cent jump in profits and a 7 per cent increase in reservation rates.

Persimmon was forced to scale back its management bonus plan this week after widespread criticism that it could have netted bosses more than £200 million from share options.

Persimmon rose 4.7 per cent to 2,604p, with Berkeley and Taylor Wimpey both up 0.8 percent.

Troubled subprime lender Provident Financial saw its shares surge 70.4 per cent to 1,002p, their highest in six months, after the company said it would raise £331 million via a rights issue.

Woodies DIY’s London-listed owner, Grafton, edged up 0.63 per cent to 798p. The Irish group, which has businesses in the Republic and UK, will report 2017 results on Thursday.

EUROPE
Europe’s media index was the top-performing sector, up 1.2 per cent at a one-month high while banks, which typically benefit from rising rates, added 0.5 percent on average.

Shares in Poste Italiane advanced 5.8 per cent after the group said that it would raise dividends and boost profits through new insurance products and parcel deliveries under a five-year business plan.

French real estate group Gecina posted the worst performance with its shares falling 5.5 percent after Ivanho Cambridge sold part of its stake at a 4.5 per cent discount to the last closing price.

US
Wall Street’s main indices fell in choppy trading as US bond yields rose after new Fed Chairman Jerome Powell said the economy was strengthening and that inflation would rise.

Following his comments, traders of US short-term interest rate futures began pricing in a higher chance of a fourth rate hike this year, based on a Reuters analysis. The benchmark US 10-year Treasury yields rose to a session high of 2.914 per cent.

In a big week for retail earnings, Macy’s reported higher-than-expected same-store sales growth for the fourth quarter.

Its shares jumped 11 percent. Fitbit slumped more than 10 per cent after the wearable device maker forecast current-quarter results below estimates.

Luxury builder Toll Brothers’ shares rose 1.2 per cent after it reported quarterly profit that beat analysts’ estimates as it sold more homes at higher prices.

– Additional reporting: Reuters

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