Eu­ro­pean shares drop over US fears

Ster­ling climbs as traders weigh lat­est on Brexit ma­noeu­vres Kingspan, CRH and Smur­fit Kappa help drag down Iseq as Ryanair closes strongly

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

Wor­ries about US bond mar­kets sig­nalling an im­pend­ing re­ces­sion, and a still rum­bling trade war be­tween the world’s top two economies, saw Eu­ro­pean shares sink fur­ther yes­ter­day af­ter a 3 per cent drop on Wall Street the pre­vi­ous day.

The pan-Eu­ro­pean Stoxx 600 ended down 1.2 per cent at its low­est level since Novem­ber 23rd. The euro-zone stock in­dex and Ger­many’s Dax also fell 1.2 per cent. Cycli­cal sec­tors such as con­struc­tion and min­ers posted the big­gest falls, down 2.2 and 1.8 per cent re­spec­tively, as in­vestors dumped stocks highly sen­si­tive to eco­nomic growth.

Dublin

The Iseq fol­lowed its Eu­ro­pean coun­ter­parts down, fall­ing 0.6 per cent at 5,665. The sour­ing of sen­ti­ment in the US hit Kingspan the hard­est. The in­su­la­tion maker, which has a grow­ing busi­ness in the US, fell nearly 5 per cent to €37.14. Build­ing ma­te­ri­als group CRH and pack­ag­ing group Smur­fit Kappa were also knocked back, clos­ing down 2.3 per cent and 3.3 per cent re­spec­tively. Green Reit was marginally up, but ri­vals Iris Reit and Hiber­nia Reit traded down slightly as the UK mar­ket mulled the di­rec­tion of the Brexit par­lia­men­tary de­bate.

It was a mixed bag for the State’s two main fi­nan­cials, with

Bank of Ire­land trad­ing up 1.7 per cent at €5.43 and AIB fall­ing slightly to €3.69. Ryanair shares were strong, clos­ing the ses­sion up 3.5 per cent at €11.80. The im­pact of Brexit on the avi­a­tion sec­tor is far from clear with just four months to go to the UK’s planned exit in March.

Lon­don

Blue-chip Lon­don stocks were feel­ing the knock-on ef­fects of a gloomy mood in the US, with the Wall Street hang­over send­ing Eu­ro­pean mar­kets into the red. The Ftse 100 in­dex closed 100.92 points lower, a de­cline of 1.44 per cent, at 6,921.84.

On the Lon­don mar­ket, Shire was 140.5p higher at 4,690.5p af­ter Ja­pa­nese firm Takeda won share­holder ap­proval for its £46 bil­lion ac­qui­si­tion of the com­pany. Ted Baker shares re­cov­ered slightly af­ter two days of de­clines as the com­pany deals with al­le­ga­tions of ha­rass­ment lev­elled at its founder, Ray Kelvin. Shares were 47p, or 3.31 per cent, higher at 1,467p.

Fel­low British brand Joules was turn­ing its at­ten­tion to Brexit by set­ting up an EU dis­tri­bu­tion hub and or­der­ing prod­ucts early as part of con­tin­gency plans for a po­ten­tial hard Brexit. It came as the com­pany un­veiled a 21.2 per cent rise in re­tail sales to £79.9 mil­lion in the first half. The share price jumped 23p, or 11.11 per cent, to 230p. The big­gest ris­ers on the Ftse 100 were Per­sim­mon, up 131.5p to

1,995.5p, Berke­ley Group ,up 193p to 3,423 and Bar­ratt De­vel­op­ments, up 23p to 473.8p. The big­gest fall­ers on the Ftse 100 were Ashtead Group, down 103.5p to 1,672.5p, Mel­rose In­dus­tries, down 8.85p to 166.35p.

Europe

Chipmakers AMS, STMi­cro­elec­tron­ics and In­fi­neon fell 2.3 per cent to 6.1 per cent fol­low­ing a sharp drop in chip stocks on Wall Street overnight. Ger­man car­mak­ers slightly out­per­formed the Dax as in­vestors di­gested what seemed a rel­a­tively pos­i­tive out­come from a meet­ing of auto ex­ec­u­tives at the White House.

US pres­i­dent Don­ald Trump pressed car­mak­ers to in­crease in­vest­ments in the United States, some­thing the ex­ec­u­tives said they planned to do but wouldn’t be able to if the ad­min­is­tra­tion went ahead with threat­ened tar­iffs. White House eco­nomic ad­viser Larry Kud­low, said he did not think that car tar­iffs were im­mi­nent. Daim­ler and BMW and Volk­swa­gen all fell less than 0.9 per cent.

Swedish pharma firm Elekta was a rare gainer, up 3.5 per cent af­ter it won Food and Drug Ad­min­is­tra­tion clear­ance for its Unity ra­di­a­tion ther­apy, clear­ing it for com­mer­cial sales and clin­i­cal use in the United States.

New York

US fi­nan­cial mar­kets were closed yes­ter­day for a na­tional day of mourn­ing to hon­our for­mer pres­i­dent Ge­orge Bush. US Fed­eral Re­serve chair­man Jerome Pow­ell’s tes­ti­mony to Congress, sched­uled for Wed­nes­day, was also can­celled.

– Ad­di­tional re­port­ing by Bloomberg and Reuters

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