European stocks hit two-week low on back of Fed rates decision
Published 19/09/2015 | 02:30
European stocks fell the most in two weeks after the Federal Reserve's decision to keep rates unchanged stoked global-growth concerns and a stronger euro weighed on export-dependent companies.
Daimler, Volkswagen and BMW dragged carmakers to a 3.3pc drop, and Germany's DAX Index led declines among western-European markets with a 3.1pc slide.
The inverse correlation between the Stoxx Europe 600 Index and the single currency reached levels not seen since 2003.
By the close in Dublin, the ISEQ Overall Index was down 0.79pc or 51.46 points to end the trading week at 6467.17.
The leaders on the Dublin market included drinks group C&C, which closed up 3pc to €3.56, while financial services group IFG increased 1.1pc to €1.90.
On the other side of the board, the laggards included insurance group FBD, which slipped 2.8pc to €7.05, while building material group CRH was down 1.6pc to €25.75.
The Stoxx 600 slid 1.8pc to 354.77 at the close of trading, for a 0.3pc weekly retreat. The US central bank showed itself reluctant to call time on an era of record monetary stimulus amid market turmoil, rising international risks and slow inflation at home.
The Fed hasn't lifted rates in almost a decade and Thursday's decision had been keenly anticipated. Faltering Chinese growth and last month's yuan devaluation in particular have shaken investor confidence and roiled markets.
Futures traders are now pricing in an 18pc chance of a rate hike in October, a 46pc possibility at the December meeting and about a 54pc likelihood in January.
"Stocks are pricing in the cost of a higher euro with the Fed being a lot more dovish than expected," said Allan von Mehren, chief analyst at Danske Bank in Copenhagen.