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

The Irish Times - Business - - BUSINESS / MARKETS - EOIN BURKE-KENNEDY

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.

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