Friday 2 December 2016

Fear of rates going up sends shares down

Published 13/11/2015 | 02:30

Traders are pictured at their desks in front of the DAX board at the stock exchange in Frankfurt. Photo: Reuters
Traders are pictured at their desks in front of the DAX board at the stock exchange in Frankfurt. Photo: Reuters

Irish shares fell on Thursday, in line with the rest of Europe, as it became increasingly likely that the US Federal Reserve will move interest rates up in December for the first time in nearly a decade.

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By the close in Dublin the ISEQ Overall Index had fallen 0.98pc, or 64.54 points, to close at 6,494.07.

The market started the trading day well but fell back after St Louis Federal Reserve president and key poilicymaker James Bullard said near zero interest rates were no longer needed.

"The US economy is quite close to normal today," he said.

Those comments pushed traders closer to expecting a rate increase in December, but the shock of tighter monetary control may hurt the US economy in the short term at least.

In Dublin, companies with significant US operations were the main laggards on the day. Smurfit Kappa Group fell 2.9pc to €24.98. CRH, which does about a third of its business in the US, fell 2.1pc to €24.78.

Specialty baker Aryzta has an extensive US presence. Its shares lost 1.4pc to €41.75.

Nearly twice as many shares fell as rose during the session. Hibernia Reit led the market, gaining 3.5pc to €1.34 after posting stronger than expected results.

Paddy Power, which is in the process of merging with rival Betfair, added 1.1pc to finish on €112.20.

The Irish market beat the major bourses in Europe, which had their worst day in over a month.

The Stoxx Europe 600 Index dropped 1.6pc. The FTSE 100 in London fell 1.9pc, while the CAC 40 Index in Paris slid 1.9pc. The Dax Index in Frankfurt gave up 1.2pc.

Rolls Royce fell 19pc after a profit warning.

Irish Independent

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