Business World

Friday 23 June 2017

Greece and US spark ISEQ drop

Thomas Molloy

Thomas Molloy

IRISH stocks dropped the most in almost three weeks as markets everywhere sagged on news that Moody's said it may cut Greece's debt rating and US jobless claims and manufacturing orders missed forecasts.

The benchmark ISEQ closed down 44.38 points, or 1.5pc, to 2873.2 points. National benchmark indices fell in all of the 18 western European markets, except Iceland. Germany's DAX fell 1.5pc, France's CAC 40 lost 2pc and the UK's FTSE 100 dropped 1.2pc.

Among the biggest decliners was Bank of Ireland, which tumbled another 4.7pc to €1.02. The country's largest lender by market value has plunged 20pc in the first four days of the week after being forced to hand over 16pc of the shares in the bank to the government. Rival Allied Irish Bank also continued its slide to a new nine-month low by slipping 0.9pc to 98c.

Clinical research group Icon, which unveiled full-year earnings yesterday, fell 1pc to €17.30. Paddy Power fell 1.2pc to €23.14 on chatter that the Government is minded to ban bookies from installing one-armed bandits in their stores.

CRH, the biggest stock on the exchange, fell 2.8pc to €16.79 as shareholders worried that the US economy, where the building materials company derives most of its income, is not performing as well as expected.

Deficits

Elsewhere in Europe, the Dow Jones Stoxx 600 Index retreated 1.6pc to 243.23 in late afternoon trade, the biggest drop since February 5. The benchmark gauge has dropped 6.5pc from this year's high on January 19 amid concern over budget deficits in Greece, Spain and Portugal and as China moved to restrict lending.

BHP Billiton led a decline by mining companies as metal prices fell. Hays, the UK's largest recruitment company, plummeted the most in 14 months after earnings missed analysts' estimates. Piraeus Bank slid 3.3pc, leading Greek lenders lower, after reporting the lowest annual profit in five years.

Greece's ASE Index slid 2.8pc after Moody's said the nation's sovereign debt rating may be cut within months unless it meets the objectives of its deficit reduction plan. If Moody's reduces its credit rating to the same level as the other major ratings companies, Greek government bonds would no longer be eligible as collateral at the European Central Bank, making it more difficult for the country to borrow.

Nokia, the world's largest mobile phone maker, slid 1.7pc after Palm, maker of the Pre and Pixi phones, said sales this year would be "well below" its forecast.

US stocks also suffered their biggest decline in three weeks in trading up to the closure of European markets.

Industrial shares pulled the S&P 500 down, with heavy equipment maker Caterpillar off 2.4pc and Boeing sliding 2pc.

Irish Independent

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