European markets fall as US job figures put focus on rate rise
Irish shares fell yesterday, as strong US jobs numbers forced traders to contemplate an increase in US interest rates sooner rather than later.
US employers added 215,000 jobs in July and the unemployment rate held at 5.3pc. That data, which was in line with expectations, has increased the likelihood that the Federal Reserve will increase interest rates this year, which would make equities less attractive to investors.
By the close in Dublin the ISEQ Overall Index had fallen 0.52pc, 324.58 points, to finish at 6,573.57.
The market had been holding steady, but once the payroll figures came out, the index plunged.
Of the major companies, Aryzta was the main laggard. The speciality baker dipped 3.4pc to €47.35.
Permanent TSB slid 2.7pc to finish the session at €5.05. Glanbia fell again, giving up 1.7pc to close at €17.94.
On the other side of the market, FBD rose 1.7pc to finish the week on €7.20. It had been speculated that the insurer would not be able to meet its Solvency II capital requirements if it sells out of its property and leisure business but FBD has said that is not the case and it would meet its capital requirements.
AIB added 3.5pc. The lender, which is 99pc-owned by the State, reported much better than expected half-year results.
It was a sea of red around Europe. The Stoxx Europe 600 Index slid 0.9pc. In London, the FTSE 100 lost 0.4pc, while the CAC 40 lost 0.7pc in Paris. Frankfurt's DAX dived 0.8pc.
"Stocks seek growth," said Daniel Weston, chief investment officer of Aimed Capital in Munich.
"With jobs numbers coming in as expected, and a rate rise likely to come, it is unsure at present what the drivers are to own stocks during this summer period."