Thursday 29 September 2016

Italian woes stop rally in its tracks

Published 05/07/2016 | 02:30

Traders work at their desks in front of the German share price index, DAX board, at the stock exchange in Frankfurt. Photo: Reuters
Traders work at their desks in front of the German share price index, DAX board, at the stock exchange in Frankfurt. Photo: Reuters

The rally that lifted Europe's stocks by the most since February lost steam yesterday as declines in Italian banks outweighed a jump in commodity producers.

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By the close in Dublin, the ISEQ Overall Index was down 1.39pc, or 80.20 points, to end the trading day at 5,669.76.

The leaders on the Dublin market included insurance group FBD, which increased 3pc to €5.78, while Hibernia Reit rose 1.4pc to €1.35.

On the other side of the board, the laggards included Glanbia, which slipped 2.1pc to €17.08, while packaging giant Smurfit Kappa decreased 2pc to €20.70.

Elsewhere, the Stoxx Europe 600 Index lost 0.7pc at the close of trading in London, with the volume of shares changing hands about 30pc lower than the 30-day average as the US market was closed for the Independence Day holiday.

Banca Monte dei Paschi di Siena sank 14pc, leading the industry lower, while miners of precious metals Fresnillo and Randgold Resources climbed at least 4.3pc with silver and gold set for their highest prices since 2014.

Equities halted a rebound after jumping 7.6pc in four days, recovering more than half their losses from the aftermath of the British vote to leave the European Union. After the referendum, both the European Central Bank and Bank of England have pledged to help make liquidity available, and traders pushed back bets for further Federal Reserve rate increases.

UK Chancellor George Osborne set a goal of lowering the corporate tax rate to 15pc in an effort to keep businesses investing in the UK. "European stocks are taking a breather after the big rally last week and the holiday in the US today," said Guillermo Hernandez Sampere, the head of trading at MPPM in Eppstein.

Additional reporting by Bloomberg

Irish Independent

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