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
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.
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.
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.
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.
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