Tuesday 17 October 2017

Irish and European stocks fall as ECB holds back on stimulus

Thomas Molloy

Thomas Molloy

Irish and European stocks declined, reversing earlier gains, as the European Central Bank and the Bank of England refrained from announcing additional stimulus measures immediately, even as it held its benchmark interest rate.

The ISEQ Overall Index closed at its lowest level in more than a month, as investors dumped shares following the ECB's announcement. The benchmark ended the session down 1.5pc at 3,930.88 points after treading water before lunchtime.

Among the biggest fallers was Aryzta which shed 3.7pc to close at €42.60 and Ryanair which closed down 2.4pc at €6.80.

Another heavyweight which depends on Europe for growth, Smurfit Kappa, closed down 2.4pc at €11.73 as investors fretted about the prospects for the eurozone economy.

The ISEQ wasn't alone; national benchmark indexes fell in all but one of the 17 western European markets open as Stockholm closed for Sweden's National Day.

The UK's FTSE 100 lost 1.3pc, Germany's DAX slid 1.2pc, and France's CAC 40 slipped 1pc. Paris, Amsterdam, Brussels and Lisbon opened an hour later than usual, as bourse operator NYSE Euronext faced a technical glitch.

STIMULUS

The Stoxx 600 dropped 1.2pc to 291.69 at the close of trading in London, after earlier gaining as much as 0.4pc. The benchmark gauge has still rallied 4.3pc so far this year as central banks around the world continued their stimulus measures.

ECB president Mario Draghi said his committee discussed additional stimulus policies and stands ready to act if needed.

"We had an ample discussion of the various measures, non-standard measures that could be utilised to repair the transmission policy," Mr Draghi told reporters in Frankfurt after the policy meeting. "We see no reason to act on all these fronts. These are measures we keep on the shelf."

In the UK, the Bank of England also retained its benchmark interest rate at 0.5pc. In London, high street bank Barclays fell to a one-month low as Sumitomo Mitsui Banking sold a stake in the lender. Car maker Fiat lost 6.5pc as its Chrysler unit announced a vehicle recall.

France Telecom rose after its Orange Business Services unit won a five-year deal to deploy a private network for Heineken. Johnson Matthey jumped to its highest price in at least 23 years after posting full-year profit that beat estimates.

Irish Independent

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