Wednesday 28 September 2016

European stocks erase advances

Published 12/01/2016 | 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

After a day of fluctuations, European stocks finally closed at their lowest levels since September yesterday, extending losses after their worst weekly plunge in more than four years.

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By the close in Dublin, the ISEQ Overall Index was down 0.19pc, or 12.19 points, to end the trading session at 6,554.26.

The leaders on the Dublin market included packaging giant Smurfit Kappa, which rose 4.25pc to €23.57, while building materials group CRH was up 0.2pc to €24.70.

On the other side of the board, the laggards included fruit company Fyffes, which slipped 2.3pc to €1.50, while speciality baker Aryzta was down 2pc to €41.85.

Elsewhere, the Stoxx Europe 600 Index erased its gain in the final hour of trading, falling 0.3pc at the close as commodity producers reversed advances. Germany's DAX Index, which heavily relies on exporters and was among the worst developed markets last week, slipped 0.3pc, after earlier climbing as much as 1.3pc.

"The uncertainty hasn't dissipated - it only takes one or two things to go wrong and we're back to where we started," said Peter Dixon, Commerzbank's global equities economist in London.

"The market reaction to what's been happening in China has been hugely overdone. Fundamentals aren't bad at all in Europe.

"We're likely to see more benefits from the low euro and the collapse in energy prices."

European equities tumbled last week as concern took over that China's slowdown will hurt the global recovery, even with the European Central Bank's stimulus supporting the region.

After its worst-ever start to a year ever, the Stoxx 600 went on to fall three more days, ending with a 6.7pc weekly plunge - a bigger slump than the Standard & Poor's 500 Index and the MSCI Asia Pacific Index. With China being Germany's third-biggest trade partner, the DAX tumbled 8.3pc.

Additional reporting by Bloomberg

Irish Independent

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