Saturday 22 October 2016

European stocks shed earlier gains

Published 06/09/2016 | 02:30

A vegetable vendor counts his money at a market in Beijing, China. Photo: Reuters
A vegetable vendor counts his money at a market in Beijing, China. Photo: Reuters

European stocks yielded earlier gains yesterday, after hitting an eight-month high as oil and mining firms cheered what was at one point a 5pc increase in crude prices.

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World shares had their biggest jump in over a month as a pact between Saudi Arabia and Russia provided that oil boost, and lacklustre US jobs figures pushed back Federal Reserve interest rate rise expectations.

Oil eventually halved its initial gains as traders noted the lack of immediate measures, but the buoyant mood elsewhere remained intact.

Bonds were in favour after US payroll numbers on Friday had tamed Fed bulls, while emerging market stocks were gunning for their best day since July as they climbed 1.3pc.

"We don't expect the Fed to do anything until next year so that lays the ground for further advances," said TD Securities strategist Paul Fage.

European bourses ended the session largely in the red, however.

Ireland's ISEQ Overall Index bucked the trend, hanging on to gains to close 0.25pc higher at 6,315.06.

Bank of Ireland slumped 4.3pc to just under 20 cent. Deutsche Bank downgraded RBS and Lloyds in the UK, where Bank of Ireland also generates a big chunk of profits. Deutsche said that RBS would be hit by the negative interest rate environment, while Lloyds could be hit by customers' re-mortgaging.

CRH closed up 1.3pc to €30.90, while hotel operator Dalata fell 2pc. Dalata releases interim results this morning.

The UK's FTSE-100 dipped 0.2pc, dented by the falls at RBS and Lloyds. Germany's DAX shed 0.1pc and France's CAC-40 was flat. RBS was 3.5pc lower at £1.97m while Lloyds was down 2.1pc at 59.6p.


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