Food producers buck trend as ISE falls with IMF's gloomy outlook
IRISH shares fell for a third day yesterday, mirroring European indices which were hit by declining German investor confidence and the news that the IMF has once again slashed its global growth outlook. Still, food producers enjoyed a good performance.
The ISEQ Overall Index closed down 0.45pc but agri businesses bucked the trend. Total Produce was up by 4.8pc, Glanbia gained 4.71pc to surpass the €10 mark and Fyffes saw increases of 1.3pc. Food companies Danone, Givaudan and Carrs Milling all reported robust first quarter financial results, buoying the agri sector.
Glanbia is expected to tomorrow as it goes ex-dividend, meaning investors will have to buy shares by the close of business if they want a dividend payout. Dublin stockbrokers Goodbody says that the strong growth evident in Danone's nutritional products business sets a positive backdrop for Glanbia whose main products are within the nutritional space, including infant formula nutrition and mostly sports nutrition.
Bank of Ireland shares also jumped, up by 4.3pc.
Mining companies and basic materials suppliers fared less positively. Fastnet Oil and Gas slumped by 10.94pc, Russian miner Petroneft fell 4.4pc and Mozambique miner Kenmare Resources was down 2.13pc.
Dragon Oil and Kenmare also fell the previous day, hit by weaker than expected economic data from China that indicated lower demand than anticipated.
All in all, 10 companies saw their share prices rise while 15 fell and 20 remained static.
European stocks fell for a third straight day. National benchmark indexes declined in all 18 western European markets except Iceland. The UK's FTSE 100 Index slipped 0.6pc, Germany's DAX Index slid 0.4pc and France's CAC 40 lost 0.7pc.
"The market is pretty pessimistic at the moment," said Catherine Raw of wealth managers BlackRock. "Its expectation is that growth in China is at that 7pc to 8pc level. Its expectation is that US growth will come through, but even then it is still a bit nervous."
The composite Stoxx Europe 600 Index sank 0.8pc, extending the decline over the past three days to 2.3pc.
Luxury goods retailer LVMH retreated to a five-month low as sales of fashion and leather goods slowed. The maker of Louis Vuitton bags said fashion and leather goods revenue rose 3pc in the three months through March, the weakest quarterly rate since the final period of 2009. Analysts had predicted 5pc growth.