Thursday 21 September 2017

German 'crisis' comments hit shares

German chancellor Angela Merkel. Photo: Getty Images
German chancellor Angela Merkel. Photo: Getty Images
Peter Flanagan

Peter Flanagan

IRISH shares started the week with a loss yesterday, as reports that a resolution to the euro crisis was unlikely to be completed this week dampened sentiment.

By the close of trading the ISEQ Overall Index had fallen 0.63pc, or 16.33 points, to 2,588.29. The index had risen as high as 2,652 on hope that there would be a final decision on Greece made at next weekend's summit of EU leaders in Brussels, but then fell back after a spokesman for German chancellor Angela Merkel called the idea a "dream" and warned that an end to the crisis "surely extends well into next year."

Losses came across a wide range of stocks, with no sector in particular suffering disproportionately on the day.

CRH fell back to €12.69 to record a daily loss of 1.63pc or 21c. The stock was hit by a report that manufacturing in the New York area shrank more than forecast. That loss alone was enough to push the index into the red.

Aer Lingus surged 11.72pc amid speculation that Etihad was in talks to buy the Government's stake in the former national airline. Ryanair, which owns just under 30pc of the airline, fell 0.77pc to €3.24.

United Healthcare rose 1.63pc to €2.44 after it announced the disposal of its stake in a UK joint venture.

Solution

Elsewhere, national benchmark indices fell in all of the 18 western-European markets. France's CAC 40 Index slipped 1.6pc. Germany's DAX Index lost 1.8pc and the UK's FTSE 100 Index fell 0.5pc. Greece's ASE Index plunged 3pc. The Stoxx Europe 600 retreated 1pc.

"Markets are off their earlier highs on the back of wary comments from Germany suggesting that the upcoming EU summit will not present a solution for the eurozone debt crisis," said Stephane Ekolo, chief European strategist at Market Securities in London.

"These comments remind investors how difficult it is to find a solution."

G4S slumped 22pc for its biggest slump in seven years. The world's largest security provider agreed to acquire ISS for about £5.2bn (€5.96bn) to add cleaning and other facilities-management services and accelerate expansion in emerging markets.

BP rose 2.2pc. Europe's second-largest oil company, said Anadarko would pay to settle all claims over the world's largest accidental oil spill in the US.

Air France-KLM Group, Europe's second-largest airline by sales, increased 1.4pc. The company's board ousted chief executive Pierre-Henri Gourgeon.

L'Oreal, the world's biggest cosmetics company, advanced 1.2pc. A French judged ruled that L'Oreal heiress and France's third-richest person, Liliane Bettencourt, was mentally unfit to manage her own affairs.

The court appointed Ms Bettencourt's daughter to manage her assets.

Irish Independent

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