Sunday 23 October 2016

Stocks drop again on global growth fears

Bloomberg and Colm Kelpie

Published 21/08/2015 | 02:30

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

Mounting concern that global growth is weakening and uncertainty about the timing of a US rate increase fuelled a second day of losses for European stocks.

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A respite for the region's equities at the start of the week was short lived, as a rout in emerging markets spread. Kazakhstan was the latest to devalue its currency, following a similar move by China last week. The UK's FTSE 100 Index fell for an eighth day, dragging it 10pc below its April peak, a level known as a correction.

By the close in Dublin, the ISEQ Overall Index was down 2.2pc, or 139.72 points, to end the trading session at 6,372.20.

The leaders on the Dublin market include Aer Lingus, which closed up 0.9pc to €2.49, while shipping and transport group Irish Continental rose 1.7pc to €4.32.

On the other side of the board, the laggards included speciality baker Aryzta, which closed down 3.9pc to €45.82 as it announced that it had completed its acquisition of a 49pc stake in French company Picard. Paddy Power was down 3.1pc to €79.84.

Elsewhere, the Stoxx Europe 600 Index lost 2.1pc to 373.44 at the close of trading, taking its decline since China's currency move to 6.6pc.

"It's a combination of factors that are taking down stocks: Chinese growth slowing down, China's market crash, the oil sell-off and fears of all this spreading to the US and Europe," said Ion-Marc Valahu, co-founder and fund manager at Clairinvest in Geneva.

The market is seeing increased volatility as investors assess the timing of a US rate rise. Minutes from the Federal Reserve's July meeting, held before the yuan devaluation, shed no further light on whether officials will act in September. "Delaying an interest-rate hike only creates volatility," Valahu said.

The sole bright spot today? Miners climbed for the first time in eight days.

Irish Independent

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