Monday 26 September 2016

Prospect of rate rise keeps lid on trading

Published 30/10/2015 | 02:31

Traders work on the floor of the New York Stock Exchange. Photo: Reuters
Traders work on the floor of the New York Stock Exchange. Photo: Reuters

Irish shares fell yesterday, as more hawkish than expected comments from the US Federal Reserve raised the prospect that it may increase interest rates in December.

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By the close in Dublin, the ISEQ Overall Index had fallen 0.7pc, or 46.36 points, to close at 6,400.50.

Shares fell from the opening, and trended lower for the rest of the session. On Wednesday evening it emerged that Fed governor Janet Yellen is now considering moving rates higher in December. That would be the first rise in nearly a decade and would signal the end of the cheap money that has washed around the planet since 2008. The Fed decided against an expected increase last month.

CRH fell 1.1pc to €24.62. The construction materials giant does a huge amount of its business in the US, where third quarter GDP came in weaker than had been expected.

Ryanair slipped 2.4pc to €13.40. Lufthansa said it was willing to "defend" its home market against the likes of Ryanair and other so-called "low cost" carriers.

Aryzta fell 2.9pc to €41.54. The speciality baker, which has been heavily criticised in recent months, has fallen by nearly a third since May.

On the other side of the board, Kerry Group added 1.9pc to hit €73.85, while Glanbia climbed 1.5pc to €17.75. Both firms are expected to benefit from China's decision to relax the "one child" policy.

The move will likely lead to a big increase in demand for the likes of infant formula, which both companies supply.

Ms Yellen's comments had a similar effect elsewhere yesterday. The Stoxx Europe 600 Index was little changed, while the FTSE 100 dropped 0.7pc. Germany's DAX Index slid 0.3pc, while in Paris the CAC 40 Index lost 0.1pc.

Irish Independent

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