Growth concerns spark share slide
Published 02/08/2011 | 05:00
IRISH shares fell in light bank holiday trading as investors worried about the outlook for growth.
CRH plunged on concerns about US spending on infrastructure and the company's persistent problems with retaining key staff.
The ISEQ tumbled 64.44 points, or 2.3pc, to 2,756.84 to post the biggest one-day decline since March 15.
Heavyweight CRH, which is also traded in London, plunged 6.1pc to €12.87 as the US Congress agreed to spending cuts rather than tax hikes.
The news is sure to crimp state spending. The shares have lost 10pc since Bill Sandbrook's departure as head of CRH's products and distribution business in the Americas.
Merrion Stockbrokers described his departure as a "disappointing announcement".
The loss of Mr Sandbrook following the departure of other "high-profile" managers, Tom Hill and Glen Pulpepper, "further dilutes the management team in the Americas", Merrion analyst Gerard Moore said last week.
Elsewhere, European stocks dropped to an eight-month low after a report showed US manufacturing expanded at the slowest pace in two years and lawmakers prepared to vote on a proposal to raise the nation's debt limit.
National benchmark indexes fell in all 16 western European markets that were open, with the FTSE 100 sliding 0.7pc and Germany's DAX dropping 2.9pc.
The Stoxx Europe 600 Index closed down 1.2pc at 262.02 in London after earlier rallying as much as 1.2pc.
"Macroeconomic data is bad and company earnings aren't good either," said Jacques-Pascal Porta at Paris-based investment firm Ofi Gestion Privee.
"The agreement on the US debt ceiling itself isn't that great and the risk that the US may lose its AAA rating is the Sword of Damocles hanging over the markets."
Shares initially traded up after US President Barack Obama announced a solution to the impasse in Washington was in sight, but then fell after figures showed manufacturing is faltering almost everywhere.
Manufacturing in the US economy expanded in July at the slowest pace since 2009 as new orders shrank and production eased.
The yield on 10-year Italian bonds rose 14 basis points to 6.01pc and yields on similar-maturity Spanish debt climbed 11 basis points to 6.19pc.
Italian and Spanish banks led European shares lower amid concern the debt crisis may spread beyond Greece to Spain and Italy.
Intesa Sanpaolo, Italy's second-biggest lender, dropped 7.9pc in Milan, while UBI Banca slid 7.9pc. Banco Santander retreated 3.8pc in Madrid, while Banco Popular Espanol lost 5pc.