European shares fell on Tuesday, dragged down by German software maker SAP following a weak forecast from US tech firm Oracle, while investors turned cautious ahead of US inflation data and the European Central Bank’s rate decision later this week.

Money market traders slowly increased their bets of another interest rate hike by the ECB heading into the central bank’s monetary policy decision on Thursday. Traders have priced in a 50 per cent chance the ECB will hike rates by 25 basis points to 4 per cent on Thursday.

Dublin

Smurfit Kappa plunged 10.2 per cent to €32.18 after the company agreed to combine with WestRock, to create one of the world’s largest paper and packaging producers worth nearly $20 billion.

The stock was the worst performer on the Irish market, with shares slumping in the morning as investors digested news that they will end up with 50.4 per cent of a $20 billion-plus ($10.7 billion) merged group, to be known as Smurfit WestRock. Smurfit Kappa shares were heavily traded throughout the day as some analysts said the company was paying a hefty premium.

Its fall dragged the Iseq to a 1.2 per cent decline for the session, which also saw building materials group CRH decline 2.3 per cent to €49.71. Insulation-maker Kingspan fell 4.2 per cent to €70.22, while Bank of Ireland was 0.8 per cent lower at €8.85.

London

The UK’s FTSE 100 was an outlier, bucking the European trend with a gain of 0.4 per cent. The blue-chip index was supported by a softer pound after data showed the labour market weakened even as wage growth stayed strong in July. This painted an unclear picture ahead of the Bank of England’s interest rate decision next week.

Associated British Foods shares rose 5.3 per cent to the top of the benchmark index after the Penneys/Primark owner raised its full-year profit outlook for the second time in four months.

AstraZeneca bounced 1.7 per cent after falling more than 4 per cent in the previous session, as the drugmaker appeared to play down speculation about its CEO’s future.

London-listed shares of Smurfit Kappa slumped 9.8 per cent.

Europe

The pan-European STOXX 600 index dipped 0.2 per cent, with basic resources losing 0.5 per cent as prices of most base metals fell on a stronger dollar.

Germany’s DAX lost 0.5 per cent with SAP down 1.8 per cent after its US peer Oracle projected current-quarter revenue below Wall Street targets as tough economic conditions pressured cloud spending by businesses.

Spain’s national consumer prices rose 2.6 per cent in the year through August, while a survey from the ZEW economic research institute showed German investor sentiment unexpectedly improved in September.

Airbus eased 2.4 per cent after engine supplier Pratt & Whitney warned about a rare manufacturing flaw that could ground hundreds of Airbus jets at any one time in coming years.

HelloFresh jumped 8.2 per cent after JP Morgan added the German meal-kit maker’s stock to its analyst focus list and positive catalyst watch.

New York

The S&P 500 and Nasdaq fell in the first hours of trading Tuesday as a jump in oil prices deepened worries about persistent price pressures ahead of crucial inflation readings this week, while Oracle slumped on downbeat forecast and results.

The cloud-services provider dropped 11.3 per cent to its lowest intraday level in three months, after forecasting current-quarter revenue below targets and narrowly missing first-quarter expectations.

Apple lost 1.4 per cent on a report that China’s Huawei Technologies has raised the second-half shipment target for its Mate 60 series smartphone by 20 per cent. Investors also awaited new iPhone 15 launch amid uncertainty over market access in China and intensifying competition. – Additional reporting: Reuters