Strong German growth boosts euro
AIB finishes the day down 0.5% after Central Bank initiates tracker investigation Wall Street down as General Electric shares plunge for second straight day
World stocks were down for the fourth day in a row yesterday, but strong economic growth in Germany boosted the euro to an almost three-week high.
AIB finished the day down 0.5 per cent after it emerged the Central Bank is preparing to start an enforcement investigation into it as part of an industry-wide examination of overcharging of tracker mortgage borrowers going back almost a decade.
Elsewhere, building materials group Kingspan recovered somewhat, up 1 per cent after what an analyst with Davy called a “pretty bad day” on Monday when its stock plunged more than 6 per cent following the publication of results.
In property, there was a “mixed bag” with Green Reit up 1 per cent, while Hibernia
Reit and Ires Reit were down 0.5 per cent apiece. Cairn
Homes, meanwhile, was down 1.8 per cent. “We did a lot of volume in it, but it was actually weaker on the back of it,” said the analyst. Fuels-to-tech conglomerate
DCC was up 0.8 per cent after Donal Murphy, the new chief executive, said it was on course for a “record” year of spend on acquisitions, as analysts predict it could have a further £700 million to deploy over the next 18 months. Ferries operator Irish Continental Group said consolidated revenues rose by 3.1 per cent to €289.9million in the first ten months of the year with a weaker sterling failing to cause any lasting damage. Following the trading update, it was down about 0.5 per cent.
Paddy Power was down 2 per cent on the day. “It seems to be stock specific too because the likes of Ladbrokes and William Hill weren’t affected,” said the Davy analyst.
Britain’s top stock index steadied yesterday as Tesco rallied after it won approval for a takeover and Vodafone reported strong results, outweighing weakness among mining companies. The FTSE 100 ended the session flat in percentage terms following three straight days of declines. The mid-cap index gained 0.3 per cent.
Tesco was the top riser, jumping 6.2 per cent after the British competition regulator gave provisional approval for its proposed £3.7 billion takeover of wholesaler Booker, moving the retailer closer to securing a new avenue of growth. Booker rose 6.8 per cent.
Vodafone was another strong performer, rallying more than 5 per cent after raising its forecast for full-year earnings growth to around 10 per cent from 4 to 8 per cent, based on a strong first half.
European shares remained stuck at seven-week lows as a fall among commodities-related sectors and telecoms firm Altice outweighed a buoyant tech sector.
The pan-European STOXX 600 erased earlier gains to end the session 0.6 per cent lower. While materials stocks and oil firms were the biggest sectoral fallers due to a pullback in oil and copper prices, the biggest individual faller was Altice.
Altice plummeted more than 13 per cent after Morgan Stanley cut its price target on the stock by 34 per cent, adding to pressure on the shares which are already down 46 per cent this year.
Italy’s Saipem was another big faller, down more than 7 per cent after it was removed from the MSCI Italy Index.
US stock indexes fell as General Electric shares plunged for a second straight day and a drop in crude oil prices hit energy stocks.
GE fell 5.9 per cent to $17.90 in the largest daily volume in two years as investors wondered if a massive overhaul of the company by new Chief Executive John Flannery will be enough to revive the industrial conglomerate.
The Dow Jones fell 30.23 points, or 0.13 per cent, to end at 23,409.47, the S&P 500 lost 5.97 points, or 0.23 per cent, to 2,578.87 and the Nasdaq Composite dropped 19.72 points, or 0.29 per cent, to 6,737.87. –