'Fiscal cliff' stalemate plays on market fears of US slump
Published 28/12/2012 | 05:00
THE ISEQ Index of Irish shares was little changed yesterday on the first day of trading after the Christmas break.
Following a strong run of late, Smurfit Kappa was down almost 2pc to close at €8.80. Paddy Power added 0.3pc to close at €62.30 – not far off its year high.
The ISEQ finished the session down marginally at 3373 points.
Meanwhile, European stocks were little changed as US jobless benefit claims dropped and home sales climbed to a two-year high, offsetting Senate Majority Leader Harry Reid's comments that a deal on the Fiscal cliff is unlikely.
The FTSE 100 Index rose less than 0.1pc to 5,954.3 at the close of trading in London, trimming an earlier increase of as much as 0.7pc.
In the continuing infighting over budgetary affairs, Democrat Harry Reid criticised Republicans for refusing to go along with any tax increases as part of a US budget remedy, and said the economy seemed to be heading over the 'fiscal cliff' of impending tax hikes and spending cuts.
Economists warn that the $600bn (€454bn) in higher taxes and spending cuts, set to kick in from January, could push the world's largest economy into recession, dragging other countries with it.
US stocks fell to session lows after Mr Reid's comments, while world stocks dipped into negative territory and the euro turned negative against the US dollar.
The Standard & Poor's 500 Index was off 12.03 points, at 1,407.80. The Nasdaq Composite Index was lower by 20.46 points at 2,969.69.
The dollar rose to 85.92 yen, its highest since August 2010. It was last up 0.4pc on the day at 85.91 yen, with option barriers cited at 86 yen and stop-loss buy orders above 86.10 yen.