US-China fears hit mar­kets as Ryanair weighs on Iseq

Irish Independent - Business Week - - John Byrne -

EURO­PEAN shares re­treated yes­ter­day as a mixed batch of cor­po­rate earn­ings failed to off­set con­cerns about the US-China trade con­flict and sub­dued euro­zone man­u­fac­tur­ing growth.

Cau­tion was also pal­pa­ble ahead of the Fed­eral Re­serve’s de­ci­sion, due yes­ter­day, with the US cen­tral bank ex­pected to keep in­ter­est rates on hold be­fore two hikes later this year.

Ba­sic ma­te­ri­als was the worst-per­form­ing sec­tor as cop­per prices slid fol­low­ing re­ports that the United States may pro­pose a higher, 25pc tar­iff on $200bn of Chi­nese im­ports.

Last month, China and the United States im­posed tit-for-tat tar­iffs on $34bn of each other’s goods and another round of tar­iffs on $16bn is ex­pected in Au­gust. Rio Tinto added to pres­sure on the sec­tor as dis­ap­point­ing re­sults sent its stock down 3.4pc, de­spite news of an ad­di­tional $1bn share buy­back.

Fac­tory growth stut­tered across the world in July, height­en­ing con­cerns about the global eco­nomic out­look as the in­ten­si­fy­ing trade con­flict be­tween the United States and China sent shud­ders through trad­ing part­ners.

In Ire­land, the Iseq Over­all In­dex slipped 0.24pc, de­spite a ro­bust per­for­mance by pack­ag­ing group Smur­fit Kappa as Ryanair tanked.

Its shares climbed 3pc to €36.14 as the FTSE-100 com­pany an­nounced a 27pc in­crease in first-half earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion.

Shares in Ryanair sank 4.2pc to €13.50 as it faces in­creas­ing strike ac­tion around Europe, with pi­lots in Swe­den and Bel­gium now set to take ac­tion.

FBD was slightly lower at €10.30 de­spite a solid set of first-half re­sults that saw its pre-tax profit soar 55pc to €18.4m.

The UK’s FTSE-100 tum­bled 1.2pc. Ger­many’s DAX was 0.53pc lower for the ses­sion, while France’s CAC-40 de­clined 0.23pc.

Earn­ings drove the lion’s share of moves across the UK mar­ket, with re­tailer Next, power provider Ag­greko, and con­trac­tor Capita among the most prom­i­nent. High-street re­tailer Next fell to the bot­tom of the FTSE 100. (Reuters)

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