Saturday 22 October 2016

European stocks tumble on concerns

Published 13/09/2016 | 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 and bonds fell in a volatile market yesterday, hit by growing concerns that global central banks' commitment to the post-crisis orthodoxy of super-low interest rates and asset purchase programmes may be waning.

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German Bund yields rose further above zero to as high as 0.06pc, their highest since Britain's Brexit vote in late June, and the rise in lower-rated Eurozone countries' yields was even sharper.

Major European stock indexes fell as much as 2pc during the day before regaining some ground, and putting them on course for their biggest losses since June, and Wall Street futures pointed to a fall of 0.7pc at the open.

Selling was driven by revived prospects of the US Federal Reserve hiking rates next week, and concerns that the European Central Bank and the Bank of Japan may be slowing their monetary policy easing efforts.

"It's a pretty broad-based sell-off on an increasing view that perhaps central banks are going to draw back from providing ever more easing," said RBC European economist Cathal Kennedy.

"The BOJ and the ECB... are questioning the effectiveness of their own policy. Add to this an increasing probability that the Fed will raise rates sooner rather than later."

Ireland's Overall ISEQ Index was also hit be the sell-off, but not as badly as some of its European peers. It closed down 0.8pc at 6,131.99.

Bank of Ireland had been unchanged earlier in the session and managed to rise 2.5pc to 20.4 cent by the end of the day.

Shares in Ryanair fell 2.7pc to 13.08, while Green REIT was 0.7pc lower at €1.44. It released full-year results yesterday.

The UK's FTSE-100 was 1.1pc lower, while Germany's DAX was down 1.3pc. France's CAC-40 fell 1.1pc.


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