European shares slip in wake of Fed-inspired rally

European shares slipped on Friday after a rally in the previous session spurred by the US Federal Reserve’s outsize interest rate cut, while drugmaker Novo Nordisk slid on disappointing obesity pill data.
The Irish index of shares fell slightly on Friday, ending the week in negative territory as gains in financial shares were offset by a drop in the share price of food groups on the Dublin market.
The Euronext Dublin finished the day on 9967, down 0.3 per cent over the session.
Bank of Ireland and AIB were both higher by the closing bell, gaining 1.5 per cent and 0.6 per cent respectively, while Permanent TSB was 2.1 per cent higher.
But there were declines in Glanbia, which was 2.73 per cent lower, and Kerry Group, which fell by 1 per cent. Ryanair was also off the pace, shedding 0.9 per cent to close the week at €16.52. Dalata Hotel Group was also lower on the day, declining by 0.96 per cent.
The FTSE 100 fell 1.2 per cent on Friday, registering weekly declines, after hotter-than-expected retail sales data from the economy, while a rise in the British pound pressured export-oriented companies.
Burberry lost 3.5 per cent after brokerage Jefferies cut its rating on the stock to underperform from neutral, citing continued difficulties for the luxury goods sector.
Further dragging the personal goods index, Dr Martens slumped over 19 per cent after a block trade was priced at 57.85 pence per share, lower than its last close of 64.10 pence.
Private investment company Bridgepoint Group lost 11.4 per cent on the news of shareholder share sale at a possible discount.
Precious metal miners were the only outliers, gaining 0.2 per cent after gold prices soared above the $2,600 (€2,329) level for the first time, extending a rally boosted by bets for further US interest rate cuts, and tensions in the Middle East.
UK stocks continue to lag both US and euro zone equities this year, with both the Fed and European Central Bank expected to ease rates faster than the BoE.
Utilities outperformed, boosted by Constellation Energy whose stock soared more than 14 per cent on news of a deal with Microsoft, to reopen part of a mothballed nuclear plant to power artificial intelligence projects.
The pan-European STOXX 600 index closed 1.4 per cent lower, though it recorded a second straight week of gains.
All big European stock markets had steep losses, except Spain, which closed 0.2 per cent lower.
Novo Nordisk shed 5.4 per cent after results from a Phase 2a trial of the Danish drugmaker’s experimental obesity pill monlunabant came in below market expectations.
Autos led declines among the big STOXX sectors, down 3.6 per cent, hurt by a 6.8 per cent slide in Mercedes-Benz which cut its full-year profit margin target for the second time in less than two months.
Other industry rivals such as Volkswagen and France’s Forvia ropped 3.4 per cent and 8 per cent, respectively.
Wall Street slid from the previous session’s record highs and the dollar steadied on Friday as the market knuckled down to the start of a rate reducing cycle that began with a midweek jumbo cut by the US Federal Reserve.
With the long-awaited decision made, markets mulled the motivations for the move, which Fed Chair Jerome Powell indicated should be seen as safeguarding a resilient economy, rather than an emergency response to weaker jobs data.
All three big US stock indexes posted early losses but have still set a course to log weekly gains thanks to all-time highs hit on Thursday as buyers piled in to riskier assets. – additional reporting: Reuters