Friday 22 September 2017

Construction-related stocks lead the fall in Irish shares

Frank Babino,
center, and Jeffrey
Sheldo work at a
post on the floor
of the New York
Stock Exchange in
New York
Frank Babino, center, and Jeffrey Sheldo work at a post on the floor of the New York Stock Exchange in New York
Thomas Molloy

Thomas Molloy

IRISH shares declined, led lower by construction-related stocks as the recent snows froze out profits. Elsewhere in Europe, shares experienced their worst one-day drop in six weeks on concern that China, the driver of the global recovery, may rein in stimulus measures.

National benchmark indexes dropped in all 18 western European markets, except Iceland. The ISEQ closed down 14.05 points, or 0.5pc, at 3087.53 points. The UK's FTSE 100 Index slid 1.7pc and Germany's DAX index lost 2.1pc and Greece's ASE Index tumbled 3.4pc.

Construction-related companies including Grafton, Kingspan and McInerney lead the charge downward. Building materials group Grafton, which applied to list an extra one million shares, was among the biggest decliners, sliding 5.2pc to €2.91 as the pace of British construction sank to a one-year low in December.

New figures showed the recent cold snap kept contractors from breaking ground on new projects. Kingspan, which sells into the British and Irish markets, fell 2.2pc to €6.26. Home builder McInerney dropped 1.5pc to 20c.

Airlines also tumbled, following a four-hour work stoppage by air traffic controllers that disrupted the travel plans of up to 20,000 passengers. Further strikes are possible at the country's airports which would further crimp profits. Aer Lingus closed down 1.4pc at 72c while Ryanair was down 0.3pc at €3.39.

Ryanair chief financial officer Howard Millar told a conference in Dublin yesterday that the airline was planning cost cuts and the first fare increases in four years in order to sustain earnings growth.

Dragon Oil gained 0.8pc to €5.18 on a day when the Takeover Panel said a unit of JP Morgan failed to record Dragon share trades during last year's failed takeover bid by Emirates National Oil Company.

The benchmark Dow Jones Stoxx 600 Index fell 1.5pc, the most in six weeks, after China's chief banking regulator said some banks were asked to reduce lending.

"China is slowing down its economy and there's a substantial risk of a significant correction to equity markets," said Philippe Gijsels, a senior structured-equity strategist at Fortis Bank Global Markets in Brussels.

Basic-resource producers were the worst performers among 19 industry groups in the Stoxx 600, plummeting 3.8pc. Copper, nickel and zinc declined on the London Metal Exchange.

Carmakers posted the second-biggest decline in the Stoxx 600. Renault retreated 3.9pc after UBS downgraded the stock to "sell" from "neutral." Daimler, the world's second-largest maker of luxury cars, lost 3pc.

Irish Independent

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