Mar­kets tum­ble Spooked in­vestors sell eq­ui­ties

Wall Street in­dexes con­tinue their slide in an­other volatile ses­sion Euro­pean shares reach their low­est point in more than 21 months

The Irish Times - Business - - FRONT PAGE - LAURA SLAT­TERY

Traders on Wall Street yes­ter­day as mar­kets re­treated. Global stock mar­kets are head­ing for their worst week in more than six months as in­vestors spooked by ris­ing in­ter­est rates sold eq­ui­ties world­wide. US pres­i­dent Don­ald Trump blamed an “out of con­trol” Fed­eral Re­serve for the down­turn. The Europe-wide Stoxx 600 tum­bled 1.6 per cent, its worst day in four months, to its low­est lev­els since the end of 2016, while emerg­ing mar­kets slid 2.7 per cent. The Dublin mar­ket was also hit by the frag­ile sen­ti­ment, clos­ing down 2.2 per cent.

Euro­pean shares hit their low­est point in more than 21 months fol­low­ing an anx­ious slide on Wall Street, as jit­ters over ris­ing US Trea­sury yields, trade ten­sions and signs of slow­ing global growth prompted a sell-off of risky as­sets.

The big US tech­nol­ogy com­pa­nies that have been the en­gine be­hind a multi-year bull mar­ket posted heavy losses overnight, but clawed back some losses in early trad­ing yes­ter­day.

Ama­zon was the worst-per­form­ing mem­ber of the “FAANG” group (Face­book Ama­zon, Ap­ple, Net­flix and Google-par­ent Al­pha­bet) as of about 1pm in New York, trend­ing about 2.1 per cent lower.

The euro zone’s Stoxx in­dex ex­tended losses dur­ing the day to close down 1.7 per cent, while the pan-Euro­pean Stoxx 600 bench­mark was down 2 per cent to its low­est level since De­cem­ber 2016. It has lost 4.5 per cent so far this week.

Bri­tain’s FTSE 100 fell 1.9 per cent, the French Cac 40 sank 1.9 per cent and Ger­many’s Dax fin­ished 1.5 per cent lower.

DUBLIN

The Dublin mar­ket was also hit by the frag­ile sen­ti­ment, with the Iseq en­dur­ing weak­ness across the board. The in­dex ended 2.2 per cent lower.

The main lo­cal news was the overnight an­nounce­ment that food group Glan­bia has agreed to buy diet brand SlimFast as part of a $350 mil­lion (€303 mil­lion) deal. The stock closed 3.3 per cent lower at €13.84.

Bank of Ire­land also fell 3.3 per cent to €6.30, while build­ing ma­te­ri­als group CRH dropped 3.2 per cent to €26.28 and Cairn Homes ended 3.7 per cent lower at €1.40.

Dalata Ho­tel Group sank 5.5 per cent, fin­ish­ing at €5.69, adding to its re­cent de­cline. Ryanair was one of the few stocks to fin­ish in pos­i­tive ter­ri­tory, nudg­ing up 0.2 per cent to €11.44.

EUROPE

Across Europe, de­fen­sive sec­tors such as health­care, tele­coms and real es­tate out­per­formed the broader mar­ket, as in­vestors sought to limit the dam­age by turn­ing to stocks that are at­trac­tively val­ued and less ex­posed to a slow­down in global growth. Ger­man phar­ma­ceu­ti­cal group Bayer was an out­lier, ris­ing 3.1 per cent af­ter its Mon­santo unit re­ceived a ten­ta­tive rul­ing for a new trial on $250 mil­lion in puni­tive dam­ages in a US weed-killer case.

LON­DON

UK shares closed at their low­est level since April. Books, news­pa­per and sta­tionery re­tailer WH Smith posted the worst per­for­mance of the pan-Euro­pean Stoxx 600 in­dex, slump­ing 11.5 per cent af­ter it un­veiled plans to re­struc­ture its high street busi­ness to face lower con­sumer spend­ing and lin­ger­ing eco­nomic un­cer­tain­ties.

Re­cruit­ing firm Hays was sec­ond, sink­ing 11 per cent, af­ter re­port­ing a slower quar­terly fee growth rate, hurt by a rel­a­tively stronger pound against other for­eign cur­ren­cies.

Oil ma­jors also con­trib­uted to drag the in­dex down as oil fell to two-week lows with prices also hit by the storm on Wall Street.

US

Wall Street in­dexes con­tin­ued their slide in yes­ter­day’s volatile ses­sion as in­vestors wor­ried about ris­ing in­ter­est rates and braced for a trade war hit to cor­po­rate earn­ings a day ahead of the quar­terly re­port­ing sea­son kick­off.

In its sixth con­sec­u­tive day of de­clines, the S&P closed down 2.1 per­cent af­ter shed­ding 3 per­cent in Wed­nes­day’s ses­sion. But at its ses­sion low the bench­mark fell 2.7 per cent to its low­est level since early July.

The Nas­daq nar­rowly avoided con­firm­ing a cor­rec­tion.

In­vestors wor­ried that eq­uity mar­kets would have trou­ble re­cov­er­ing as ris­ing in­ter­est rates co­in­cide with un­cer­tainty about how much earn­ings growth would be hurt by a US trade war with China.

The Dow Jones fell 545.91 points, or 2.13 per cent, to 25,052.83, the S&P 500 lost 57.31 points, or 2.06 per cent, to 2,728.37 and the Nas­daq Com­pos­ite dropped 92.99 points, or 1.25 per cent, to 7,329.06. – Ad­di­tional re­port­ing: Reuters

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