Markets: Recession fears spark selling bout
Thursday January 17 2008
After looking like it might close in the black last night, Dublin shares took a late turn south to leave the ISEQ index down 10.29 points at 6468.53.
The news that JP Morgan's fourth-quarter profit fell 34pc on exposure to subprime mortgages stoked fears that the giant US economy is heading for recession and the result was to spark another bout of selling in Dublin.
Alcohol
This was preceded by drinks group C&C warning that revenue and operating profits will be less than expected when it reports full year figures -- the shares fell 17pc in the wake of this but came back later on. It warned that lower UK cider sales would hurt earnings, blaming the poor UK performance on the loss of pub market share.
There was plenty of life in construction-related stocks with CRH climbing 21c and McInerney up on speculation that stake building in the housing firm will continue.
Other notable moves were Paddy Power, up 14c to €18.74, Greencore, down 19c, and Tullow Oil, which is set to build a refinery in Uganda, down 19c.
Shares at Ryanair were up 5c to 3.73 after it announced the opening of a new base at Birmingham.
The FTSE 100 Index plunged below the psychological 6,000 mark as fears over the health of the US economy overshadowed the market.
A second day of selling from nervous investors saw the Footsie fall more than 1pc, or 82.7 points to 5942.9 -- its lowest close since August 16 last year at the height of the credit crunch panic. The decline followed a 3pc fall on Tuesday as a volatile start in US markets unsettled traders.
The London market began the session under a cloud after a 277-point fall for the Dow Jones Industrial Average on Tuesday and more negative corporate news yesterday saw further turbulence on Wall Street.
Falling profits and credit crunch writedowns from US investment bank JP Morgan -- former prime minister Tony Blair's new employer -- and weak figures from technology giant Intel kept up the pressure after Tuesday's heavy losses from the world's largest bank, Citigroup, and economic concerns after falling US retail sales in December.
Mining
In London, heavily weighted mining stocks played a part in dragging the Footsie lower as traders reacted to lower base metal prices and fretted over a possible faltering in demand for commodities in a slowing global economy.
Antofagasta was the Footsie's worst performer -- down 43p to 589.5p, a fall of almost 7pc. It was closely followed by Rio Tinto, off 331p at 4665p, and Kazakhmys, which fell 74p to 1193p as the sector accounted for eight of the top nine fallers.
- Pat Boyle
