Monday 5 December 2016

European shares fall amid EasyJet woes

Published 07/10/2016 | 02:30

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)

European shares fell yesterday after EasyJet dropped to its lowest in more than three years, although the beaten-down banking sector rose for the third straight session.

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The STOXX 600 index fell 0.4pc after opening in positive territory, extending the previous session's losses, when both shares and bonds were hit by worries that the European Central Bank might wind down the pace of bond-buying before the end of its asset-purchase programme.

EasyJet fell almost 7pc after saying that its annual profit would fall by more than 25pc this year, its first drop since 2009. Shares in Aer Lingus owner IAG, and Ryanair, fell 3.9pc and 1.5pc respectively.

"Despite EasyJet's strong margins... and attractive strategic positioning, we see negative earnings per share momentum as the dominant driver for the shares in the short term," according to analysts at Liberum, who have a 'sell' recommendation on the stock. Ireland's Iseq Overall Index fell 0.4pc to 5,992.65. It was pulled lower by that decline in Ryanair's shares. Other stocks also fell, including property investment firms Green REIT and Hibernia REIT. They were down 4.1pc and 2.5pc respectively. Shares in Permanent TSB were 3.9pc lower at €2.20, while shares in Bank of Ireland rose 2.7pc. Shares in Providence Resources were unchanged yesterday after the company announced that new chairman Pat Plunkett had purchased 1m shares at a price of €0.135.

The UK's FTSE-100 was down 0.4pc. Germany's DAX edged 0.1pc lower and France's CAC-40 was down 0.2pc.

Deutsche Bank rose as much as 2.7pc after reports that Germany was pursuing discreet talks with US authorities to help the lender secure a swift settlement over the sale of toxic mortgage bonds.

Reuters

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