Business Irish

Friday 2 December 2016

Rebound reversal as European stocks post major slide

Bloomberg/Colm Kelpie

Published 20/08/2016 | 02:30

The ISEQ was down 0.44pc
The ISEQ was down 0.44pc

European stocks posted their biggest weekly slide since the run-up to the Brexit referendum on speculation the recent rebound might have been overdone.

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By the close in Dublin, the ISEQ Overall Index was down 0.44pc, or 26.6 points, to end the trading session at 6,042.89. The leaders on the Dublin market included speciality baker Aryzta, which rose 1.6pc to €34.62, while drinks group C&C increased 1pc to €3.87.

On the other side of the board, the laggards included packaging giant Smurfit Kappa, which fell 0.9pc to €20.89, while building materials group CRH slipped 1.5pc to €28.97.

Elsewhere, the Stoxx Europe 600 Index resumed declines after a brief respite on Thursday.

Concern over the health of Italian lenders and an upcoming referendum in the country that may lead to the resignation of its prime minister dragged the FTSE MIB down the most among western-European markets.

A gauge of miners fell the most in a month as commodities sank amid a rebound in the dollar.

Investors are questioning the recovery that lifted the Stoxx 600 as much as 12pc since the UK vote to leave the European Union.

Scepticism about the ability of central bank stimulus to boost growth amid political turmoil has triggered record outflows from the region's equity funds, with a Bank of America report yesterday showing that managers withdrew money for a 28th straight week.

"I think it's the case that we've run up pretty hard in the past six weeks or so and that slightly caught investors unawares," said James Buckley, a portfolio manager at Baring Investment Services. "That's probably going to mean that to push on further from here we would need some further affirmative data. I wouldn't be surprised to see a pause around these levels, perhaps with a downward drift." The Stoxx 600 retreated 0.8pc to 340.14 at the close of trading.

Irish Independent

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