European markets' days of optimism run out
Published 12/05/2016 | 02:30
The optimism that lifted European equities in the past two days faded, and the shares headed toward their biggest decline in a week.
By mid-afternoon yesterday, the ISEQ Overall Index had fallen 0.11pc or 7.05 points to reach 6,159.81.
The leaders on the Dublin market included speciality baker Aryzta, which increased 1.4pc to €34.23, while banana company Fyffes increased 1pc to €1.60.
On the other side of the board, the laggards included building materials group CRH, which slipped 0.9pc to €25.52, while insulation group Kingspan slipped 0.04pc to €23.49.
Elsewhere, the Stoxx Europe 600 Index lost 0.6pc at 1:43pm in London. The gauge advanced 1.4pc in the past two days, rebounding from a one-month low amid easing concern over the state of the global economy and central-bank policy.
Still, its rally from the February low has been faltering, and the gauge remains 4.7pc below its April 20 high.
Raiffeisen Bank International sank 10pc after saying it's considering merging with its parent company to ease the pressure of regulatory requirements.
EON fell 6.3pc after posting a decline in revenue amid a slide in power prices.
JC Decaux and Numericable-SFR dragged media shares lower after their earnings reports.
"Earnings so far have been OK but not strong enough to deliver a real upside for stock prices," said Ralf Zimmermann, a strategist at Bankhaus Lampe in Dusseldorf, Germany.
"What is still really missing from this environment is a notable rally in the banking stocks which is an important driver for any stock market rally."
As of Tuesday's close, the Stoxx 600 was down more than 8pc for the year. Since the February low, banks rebounded less than the broader gauge and they remain the biggest losers of the year with a more than 20pc plunge. Italy's Banco Popolare and Banca Popolare di Milano Scarl fell more than 9pc yesterday, making the nation's FTSE MIB Index the biggest decliner among western-European markets.
Among other companies moving on financial results, JC Decaux sank 8.6pc as it forecast a decline in second-quarter organic revenue growth. Numericable-SFR, which missed analysts' profit estimates, tumbled 5.7pc. Mediaset dropped 6.3pc after it posted revenue that fell short of projections.
Alstom SA climbed 2.7pc as its annual profit surged after getting an Indian order for electric locomotives. Deutsche Post added 2.3pc after saying that operating profit rose at the fastest rate in 13 quarters.