Friday 28 October 2016

European sentiment at 'rock bottom'

Published 15/01/2016 | 02:30

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

European stocks fell, snapping a two-day rebound, amid renewed concern about global-growth prospects.

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By the close in Dublin, the ISEQ Overall Index was down 2.4pc, or 158.43 points, to end the trading day at 6,454.55.

The leaders on the Dublin market included recruitment firm CPL Resources, which rose 0.8pc to €6.10, while Applegreen was up 3pc to €5.20.

On the other side of the board, the laggards included speciality baker Aryzta, which slipped 3.5pc to €41.50, while hotel group Dalata dropped 2.6pc to €5.20.

Elsewhere, the Stoxx Europe 600 Index declined 1.5pc at the close of trading. It pared a drop of as much as 3.3pc as energy producers reversed losses, following oil prices higher.

Europe's benchmark has still tumbled 18pc since an April high, inching closer to the common definition of a bear market.

"Everything boils down to concerns about global growth," said Ralf Zimmermann, a strategist at Bankhaus Lampe in Dusseldorf. "There are few people out there willing to buy the dips because everyone is scared that the sell-off will be deeper the next day. And it has been. Sentiment is rock bottom. I would sell any highs. There is definitely potential for bigger losses."

Stocks are falling in 2016 on concern China's slowdown may be worse than expected and as oil slumped further. A rally in Europe on Wednesday weakened heading into the close, signalling that investors lack the conviction to drive a rebound after stocks' worst-ever start to a year. Prospects for global profit growth are also worsening, with analysts cutting forecasts by the most since 2009, according to a Citigroup index. Among stocks active on corporate news, Renault plunged 10pc after its offices in France were raided by government fraud investigators as part of a probe into vehicle emissions.

Additional reporting by Bloomberg

Irish Independent

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