Tuesday 6 December 2016

European shares fall on weak data and outlook

Published 09/06/2016 | 02:30

Traders work on the floor of the New York Stock Exchange (NYSE). Photo: Reuters
Traders work on the floor of the New York Stock Exchange (NYSE). Photo: Reuters

European shares fell by mid-afternoon yesterday, retreating after two straight days of gains, as a drop in Austrian bank Erste knocked financial stocks.

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Mixed Chinese economic data, along with a decision by the World Bank to slash its 2016 global economic growth forecast, also gave some traders a reason to take a negative view on the outlook for stock markets.

"The Chinese export figures looked a bit disappointing, and the World Bank's cut to its forecasts is another reason to be a bit bearish on the markets," said Berkeley Futures' associate director Richard Griffiths.

Erste fell after insurance company Uniqa said late on Tuesday it would sell around 17.4m Erste shares.

The shares of payment systems company Ingenico also fell 4.6pc, hit by a slump in rival VeriFone after VeriFone posted lower-than-expected earnings.

Shares in German pharmaceuticals company Stada Arzneimittel dropped 3.4pc after it denied a recent media report that it had held talks with CVC Capital Partners over a potential buyout.

In Ireland, the ISEQ Overall Index was 0.9pc lower by late aternoon.

Shares in Bank of Ireland were 2.6pc lower at 26 cent, but Permanent TSB was 2.6pc ahead at €2.19.

Ryanair was 1.3pc lower at €13.70, while Green REIT was down 1.4pc at €1.46.

The UK's FTSE-100 was barely up, edging 0.1pc ahead. Germany's DAX was 0.87pc lower, while France's CAC-40 was down 0.65pc.

"After 48 hours of gains due to fading expectations of a rate increase in the US this summer, the market is seeing a correction even though there isn't much conviction," said Anthilia Capital fund manager Giuseppe Sersale.

Among the top risers, German payments company Wirecard jumped 5pc with traders citing reports that a Chinese company was interested in acquiring a full or partial stake.

The FTSE was the top performing European market, gaining on the back of a rally in mining stocks including Anglo American and Glencore.

German utility EON gained 3pc. Its chief executive, Johannes Teyssen, urged shareholders to support the company's plans to spin off Uniper, the operator of its conventional energy business.

Mr Sersale said the Chinese data was not that bad overall but that sentiment could be weighed by ongoing concerns surrounding the outcome of a UK vote on whether to stay in the EU later this month.

Nervousness over that vote helped send Germany's 10-year government bond yield, the benchmark for Eurozone borrowing costs, to a record low.

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