Global stocks fall on Brexit sentiment
Bank of Ireland drops after adding more customers to tracker compensation list US tech stocks stumble amid scepticism over a Republican tax overhaul plan
Broad equity market declines in Asia and Europe and a lower open on Wall Street threatened to spoil the longest winning streak for MSCI’s global stock index since 2003. Japan’s Nikkei index saw a 2 per cent swing after hitting its highest since 1992 and Europe’s main indexes were firmly in the red as tech and commodity stocks tumbled.
In the US, technology stocks dragged down indexes amid scepticism over a Republican tax overhaul plan.
The Iseq index dropped 41 points to 6,92, roughly mirroring declines elsewhere. Bank of Ireland, which announced an additional 6,000 of its customers would be compensated as part the tracker mortgage scandal, saw its shares drop 1.3 per cent to €6.46. AIB, which is also embroiled in the scandal, saw its shares fall 0.6 per cent to €5.06 per cent while Permanent TSB held steady at €2.02. Elsewhere Swiss Irish food giant Aryzta fell nearly 1 per cent to €25.09 after it emerged its new non-executive director, Jürgen Steinemann, was the subject of an insider trading investigation involving retail group Metro.
Ryanair traded down marginally at €16.96 after it emerged the budget airline was suing three pilots over an email it says falsely inferred the airline had misled investors, facilitated insider dealing in shares by management and was guilty of market manipulation.
Heavy losses from luxury group Burberry weighed on Britain’s top share index which hit a two-week low as investors showed anxiety about the retail and housebuilding sectors.
Britain’s blue-chip FTSE 100 index sank 0.6 per cent, slightly outperforming a sharp slump in European stocks, while mid-caps dropped 1.1 per cent.
Burberry fell 9.4 per cent, its biggest one-day loss since September 2012, on the high cost of its plans to move even more upmarket by focusing on leather goods and fashion and cutting sales to non-luxury stores. Marks & Spencer fell 2.4 per cent, while small-cap department store Debenhams sank 6.9 per cent. Housebuilders also suffered, with shares in Persimmon , Taylor Wimpey and Barratt Developments falling by 2.8 per cent to 3.9 per cent after a survey showed house prices in Britain were no longer rising. Weak results added to price pressures for mid-cap builder Redrow, which was down 6.6 per cent. Bovis Homes, Crest Nicholson and Bellway fell 4.9 to 5.7 per cent.
Europe’s main bourses were firmly in the red following a tumble from tech and commodity stocks and as Brexit talks resumed amid low expectations in Brussels. There were a series of ECB speeches and buoyant new growth forecasts from the European Commission, though bond markets were mostly quiet following a rally this week in benchmark US Treasuries and Bunds.
Wall Street stocks dropped yesterday, weighed down by losses in Microsoft and other technology issues as investors turned their attention to a US Senate Republican plan that would delay corporate tax cuts that investors want very much.
The Dow Jones Industrial Average lost 0.43 per cent to end at 23,461.94, while the S&P 500 declined 0.38 per cent to 2,584.62. The Nasdaq Composite dropped 0.58 per cent to 6,750.05. Apple, Microsoft, Alphabet, Oracle and Facebook were among the stocks weighing most on the S&P 500. The sector’s stretched valuations make it vulnerable to selling as investors worry promised tax reductions might not emerge. Macy’s jumped 10.98 per cent after the department store operator’s profit came in above expectations. In extended trade, Nordstrom dropped 4 percent after that retailer reported quarterly sales short of analysts’ expectations. Walt Disney Co lost 3 per cent after the bell following its quarterly report.