Business Irish

Wednesday 22 February 2017

Bank declines drag European stocks down from two-week high

Published 20/02/2016 | 02:30

Traders work inside a post on the floor of the New York Stock Exchange. Photo: Reuters
Traders work inside a post on the floor of the New York Stock Exchange. Photo: Reuters

A SLIDE in banking shares pulled European stocks from a two-week high, while investors assessed valuations and corporate earnings after the recent rally stalled amid falling oil prices.

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By the close in Dublin, the ISEQ Overall Index was down 0.08pc, or 4.67 points, to end the trading week at 6,125.37.

The leaders on the Dublin market included insulation group Kingspan, which increased 2.9pc to €23.34, while drinks group C&C rose 0.1pc to €3.49.

On the other side of the board, the laggards included building materials group CRH, which slipped 1.4pc to €22.99, while insurance group FBD dropped 1.1pc to €6.35.

Elsewhere, the Stoxx 600 slipped 0.8pc to 326.08 at the close of trading, after earlier falling as much as 1.5pc and rising 0.3pc. The measure is down 11pc this year amid concerns ranging from global growth and the deepening oil slump, to the capital strength of lenders and dissipating faith in central-bank support.

Banco Santander fell 3.2pc and Deutsche Bank lost 2pc, with concerns over the health of lenders reigniting as the European Central Bank said that five institutions under its supervision missed a key capital ratio in 2015.

Credit Suisse Group lost 2pc after Milan prosecutors were said to be probing the institution over certain past transactions.

Allianz weighed on insurers, falling 1.3pc after quarterly profit missed estimates.

Seadrill led a retreat in energy stocks as oil slid. "The banking sector is still under stress," said John Plassard, senior equity-sales trader at Mirabaud Securities in Geneva.

"I'm not sure the market is convinced until they see the results of the stress test that the system is solid.

"People that benefited from the strong rally are taking a bit of profit and the barrel is going a bit lower and impacting the energy sector."

Additional reporting by Bloomberg

Irish Independent

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