Rash of tariff letters unnerve investors with banks worst hit as markets drop
Dublin
The Irish index of shares fell more than 2.7 per cent on Friday to end the week at 11,097. The market was dragged lower by weakness in banking and building stocks, with travel stocks also shedding value.
AIB and Bank of Ireland lost 5.3 per cent and 2.5 per cent respectively from their values on Friday. Earlier on Friday, AIB reported first half results that showed that its loan book grew by only 1 per cent in the first half of the year.
READ MORE
Analysts had also queried why the bank is not making a large special distribution to investors, even though it will return to paying interim dividends for the first time since 2008.
Insulation specialist Kingspan was down 4.6 per cent, while home builders Cairn and Glenveagh were each off 1.6 per cent.
Airline Ryanair, meanwhile, shed almost 2.6 per cent by the close of the session.
London
Healthcare shares led British equities lower on Friday, as US President Donald Trump slapped fresh levies on dozens of countries and demanded lower prescription drug prices.
The blue-chip FTSE 100 fell 0.7 per cent, its biggest drop in percentage terms in almost four months, and also snapped a six-week winning streak. The domestically focused midcap FTSE 250 was down 1.2 per cent on the day and posted its second straight weekly decline.
British healthcare stocks were down 1.4 per cent a day after Mr Trump sent letters to the leaders of 17 big pharmaceutical companies, including AstraZeneca and GSK, outlining how they should slash US prescription drug prices. AstraZeneca fell 1.9 per cent and GSK was 1.5 per cent lower.
British Airways owner IAG fell 1.7 per cent after the airline group said it expected cost rises linked to air traffic control issues.
Pearson rose 6.1 per cent after the education company forecast stronger growth in the second half.
Europe
The pan-European Stoxx 600 index slid 1.9 per cent and marked its biggest one-week drop since early April when Trump unveiled his tariffs on world economies. The euro Stoxx volatility index jumped 4.25 points to its highest in over one-month.
The Stoxx index has lost over 5 per cent from its March peak, after coming within 2 per cent of that level earlier this week, dragged down by a record plunge in Novo Nordisk shares, and as investors assess the implications of the US-EU trade deal.
The Denmark-listed Wegovy-maker shed 1.8 per cent and logged its steepest weekly decline on record.
Most regional bourses were in the red, with Germany's blue-chip DAX down 2.7 per cent, while Denmark's OMXC fell 1.8 per cent to a nearly two-year low.
Banks, which had rallied earlier in the week, were down 3.4 per cent and were the top sectoral underperformer as they notched their biggest one-day drop since early April.
In a bright spot, Italy's Campari was the big winner on the Stoxx 600 index, adding 7.9 per cent after reporting an increase in second-quarter operating profit.
New York
Wall Street's main indices led a global sell-off on Friday as new US tariffs on dozens of trading partners weighed on sentiment, while a weaker-than-expected payrolls report added to risk aversion.
The Dow Jones Industrial Average was 573.05 points, or 1.3 per cent weaker at 11:39am, on 43,557.93, while the S&P 500 lost 93.99 points, or 1.48 per cent, to 6,245.40 and the Nasdaq Composite lost 412.60 points, or 1.95 per cent, to 20,709.85.
Further weighing on markets, Amazon dropped 8 per cent after the company's growth in its cloud computing unit failed to impress investors, widely lagging its AI-focused rivals, Alphabet and Microsoft that reported on Wednesday. – Additional reporting: Reuters
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Examiner
37 minutes ago
- Irish Examiner
Venture capital funding environment for Irish AI start-ups 'challenging'
Despite venture capital investing heavily in generative AI during the first half of the year, Irish AI start-ups are finding the funding environment 'challenging', a new report from consultancy company EY has found. Between January and June, global venture capital investment in generative AI surged to $49.2bn (€42.5bn), outpacing the total for all of 2024 at $44.2bn, according to EY Ireland's latest Generative AI Key Deals and Market Insights study. The company said the sharp rise comes as venture capital firms concentrate on more mature, revenue-generating AI companies, resulting in fewer but significantly larger deals. Average transaction size for late-stage deals more than tripled to more than $1.55bn, up from $481m in 2024. EY Ireland's technology, media and telecoms lead Grit Young said this investment momentum was expected to continue to build into the second half of this year with the launch of new generative AI platforms. However, the report noted while Ireland had emerged as a strong adopter of AI among start-ups, many are struggling with access to capital and infrastructure. 'In Ireland, the appetite for AI adoption is strong, and we are working with many indigenous and international companies who are already well established on their AI journey,' Ms Young said. 'However, for AI start-ups, the funding environment remains challenging, particularly in the €1m to €10m funding space.' She added many start-ups with high potential were finding themselves in a difficult middle ground where they are 'too advanced for early-stage support, yet not quite large enough to attract global venture capital attention'. 'However Ireland has a deep and well-established pool of talented entrepreneurs, and with increased collaboration between businesses, founders, academic institutions and policymakers, there are plenty of opportunities to be seized,' she said.
Irish Times
37 minutes ago
- Irish Times
Jones Engineering targets €1.5bn turnover as overseas business expands
Irish construction firm Jones Engineering says it expects turnover to surpass €1.5 billion this year as it continues to expand overseas. According to recently filed accounts, the contractor, which specialises in large-scale industrial projects for the life sciences sector, saw turnover increase by almost 25 per cent to €1.28 billion last year. The company, which employs 4,500 staff across 19 countries, reported a profit of €75.5 million, up from €70.8 million the previous year. 'Our increased turnover in 2024 reflects the ambitious growth trajectory and long-term vision of Jones Engineering,' chief executive Stephen McCabe said. READ MORE 'We expect this momentum to continue, with turnover projected to surpass €1.5 billion in 2025. While we remain the market leader in our sector in Ireland, our strongest growth has come from our expanding overseas operations. 'Looking ahead, 2025 is set to be another strong year for the company with a robust pipeline of work extending into 2026 and beyond,' he said. Increased levels of business saw the company recruit almost 1,000 additional staff in 2024, including more than 240 hires at graduate, internship and apprenticeship levels and about 494 in engineering, craft and support roles. Jones said its baseline headcount grew by 431 (18 per cent) in 2024, which it described as 'significant growth'. The company recently dropped a legal case taken against trade union Unite and three of its officials arising from a strike two years ago. The builder had claimed it suffered financial damage as a consequence of the industrial dispute. Jones's lawsuit prompted Unite and global trade union federation, Building and Woodworkers International (BWI), to file a complaint against the company and its owner, US-based Cathexis, with the Organisation for Economic Co-operation and Development. Founded in the 1890s, Jones Engineering was acquired by Cathexis Holdings in 2022 for an undisclosed sum. The company said it generates turnover from the supply of mechanical and electrical engineering services and fire protection services. The latest results showed the directors declared and paid a dividend of €63 million during the year, down from €73 million in 2023.
Irish Times
5 hours ago
- Irish Times
The Irish Times view on the budget debate: striking a difficult balance
A clear danger is emerging in the run up to October's budget. It is that all the spare cash available will be spent as Fianna Fáil and Fine Gael each try to get as many of their own policies into the package as they can, with the Independents also pitching in. Rather than taking a balanced view of the outlook, the negotiations thus turn into a haggling exercise. There were media reports this weekend of – unnamed– ministers saying that the economic outlook had not changed much and the budget can go ahead as planned. In this context, pressure will come on, in addition to the €9.4 billion package of tax cuts and spending increases outlined in the Summer Economic Statement, to have additional once-off measures. Ministerial statements, while suggesting there will not be a full cost-of-live package, have become more equivocal on this point. Ministers may be correct to believe that the short-term budgetary outlook has not changed markedly, with the US and EU striking a trade deal. But two points are relevant here. The first is that the two sides have really just set a framework for future talks and a lot remains to be signed off. Also, a separate US investigation into the pharma sector carries danger for Ireland., The second point is that, as Gabriel Makhlouf, the governor of the Central Bank has said, the Government needs to be careful not to add further demand to an already strongly-growing economy. This is all the more the case given the significant planned increase in State investment. READ MORE The balance will be hard to get right. But it must err towards caution. As well as the short-term issues, the economy is now facing significant uncertainties over the next few years. The trade environment is far from settled and tensions between the US and EU may still emerge. Meanwhile, the US president is determined to attract pharma investment back to the US from countries such as Ireland and this could threaten both jobs and tax revenue. And that is before we consider a troubled and rapidly changing international political situation. Ignoring these factors and squabbling over budget giveaways is the wrong approach.
