European stocks fall from 21-month high as Iseq dips
European shares fell yesterday, slipping from 21-month highs, with Italian banks and construction stocks particularly weak.
By late afternoon in Dublin, the Iseq Overall Index was down 0.39pc or 27.96 points to 7,112.6.
The leaders on the Dublin market included packaging giant Smurfit Kappa, which increased 0.9pc to €26.18, while Permanent TSB jumped 5.4pc to €2.74. The bank reported earlier yesterday that it had increased its share of the fast-growing mortgage market in the first three months of the year. On the other side of the board, the laggards included Paddy Power Betfair, which slipped 0.6pc to €99.10, while drinks group C&C dropped 3.7pc to €3.71.
Elsewhere, the Stoxx Europe 600 Index was steady at 395.26 by mid morning. A rally in the benchmark sparked by global reflation bets after the US election gathered momentum last month after the first round of the French vote, with traders predicting accurately that Emmanuel Macron would be president.
Roche Holding was the biggest drag on the Stoxx 600, falling as much as 1.9pc after its Genentech unit said its cancer drug failed to meet the main goal of a late-stage clinical trial.
Some shares were active after reporting results. Barratt Developments Plc rose 3.3pc after saying its annual profit is likely to be at the upper end of analysts' forecasts.
TalkTalk Telecom Group slumped as much as 17pc after cutting its dividend by 35pc to tackle debt.
Construction and materials stocks were the biggest fallers, led by HeidelbergCement which reported its first-quarter operating profit slipped 3pc.
A fall in Italian banking stocks put pressure on the European banking sector, which reversed earlier gains, with BPER Banca down 4.5pc after its first-quarter net profit halved as a result of a write down of its stake in Italian bank rescue fund Atlante.
"The main share price driver for BPER remains excess capital ... and its use. Little has changed on this front with this set of results as there was no news on strategy," analysts at UBS said in a note.
Ubi Banca and Mediobanca fell between 1.9pc and 1.2pc respectively, while Italy's banking index was down 0.6pc.
Ken Odeluga of City Index, said that following the French presidential election the ECB could feel less constrained to begin tapering its asset-buying programme.
"If you bring that into the picture for the Italian banks, it brings back onto the cards the whole problem about their capitalisation."