ISEQ drops as leaked report raises doubts on growth
IRISH shares fell for the third day in a row yesterday, as a leaked report from the European Commission painted a bleak picture of the state of the Irish economy.
By the close in Dublin, the ISEQ Overall Index had fallen 0.53pc, or 18.49 points, to close at 3,481.48.
This ensured that the index posted a small loss for the week, having opened on Monday at 3,497.
A report from the European Commission raised doubts about Ireland's growth forecasts, and implied that further budget cuts may be necessary. The report also said the country's banks may need further capital injections.
The pharmaceuticals sector had a particularly difficult day. Merrion Pharmaceuticals fell 6.6pc to close at 36c, while Elan lost 4.7pc, closing at €7.75.
Speciality baker Aryzta dipped 1.9pc to finish the week at €40.35, while insurer FBD slid 1.8pc to reach €10.70.
Even though the index posted a loss overall, more stocks rose than fell.
Kerry Group climbed 1.6pc to finish at €38.75, while Permanent TSB surged 25.4pc.
Elsewhere, European stocks slipped for a second day as an inflation report led to concern that China has less room for monetary easing, while the trade deficit of the US unexpectedly widened.
The Stoxx 600 lost 0.1pc. National benchmark indices gained in 11 of the 18 western-European markets. France's CAC 40 and Germany's DAX both advanced 0.1pc, while the UK's FTSE 100 added 0.3pc.
"The Chinese inflation report is what is weighing on equities as it has some investors worried that it could limit the degree of further stimulus in China," said Mark Andersen, co-head of asset allocation at UBS in Zurich.
"We still think the positive growth momentum is supportive of markets. We're seeing a synchronised pickup of growth on a global basis, providing investors with an underlying positive sentiment."
A gauge of European mining shares posted the biggest drop of the 19 industry groups in the Stoxx 600, slumping 1.7pc. BHP Billiton, the world's largest mining company, declined 2.7pc, its biggest slide since August. Rio Tinto lost 1.2pc. Anglo American dropped 1.5pc.
Tullow Oil slumped 3.2pc. The Irish-led explorer focusing on Africa and Latin America said it more than doubled write-offs from exploration in 2012 because of unsuccessful wells in Ghana, Guyana and Suriname.