Business World

Thursday 21 September 2017

ISEQ falls as Fed looks to scale back on stimulus

Sarah McCabe

Sarah McCabe

The ISEQ Overall Index fell during trading yesterday, mirroring European indexes which retreated as investors weighed up comments by US Federal Reserve on when to scale back its bond-buying programme. The Fed's policy makers will start reducing its quantitative easing programme in September, according to Deutsche Bank.

In Dublin, Ryanair shares stayed above the €7 barrier for a second day during afternoon trading. The airline first breached the €7 on Tuesday after announcing positive traffic results.

Smurfit Kappa fell 2.9pc to €12.04 during trading, paring recent gains 4pc. Travel software firm Datalex was down 5.6pc to 85c.

Glanbia was up 1.4pc to €10.43 while Kerry Group gained 0.14pc to €44.06. Dublin stockbrokers Davy said yesterday that the upward trend in global dairy prices since April 2012, when prices nearly doubled at global dairy trade auctions, has peaked and is giving way to a downtrend.

It was a good day for Allied Irish, which advanced as much as 5.6pc to 8c, while oil and gas company Aminex gained 3.5pc to 3c. On the other end of the scale was mining company Petroneft, whose share price shed 12.5pc to 4c.

National benchmark indexes declined in every western European market that was open, except for Iceland. Denmark was closed for a public holiday. The UK's FTSE 100 lost 1.4pc as Tesco reported sales that fell below expectations. France's CAC 40 slid 1.2pc and Germany's DAX retreated 0.8pc.

"What we're seeing is a lot of short-term traders repositioning themselves in fear of the unknown," said John Haynes of Investec. "The tapering option is very much available to the Fed and it will only do so if the economy improves, which in the long term is a good thing. Eventually, we'll concentrate on fundamentals."

The composite Stoxx Europe 600 Index dropped 0.9pc to 296.91 as more than five shares fell for every one that rose.

Meanwhile, Carrefour slumped 4.1pc to €21.47 after HSBC downgraded France's biggest retailer to underweight. It said the company's profits in Europe may not hit estimates as sales fall in Spain, Italy and Poland.

TAKEOVER

Drug company Meda dropped 6.2pc to 81.85 kronor after the manufacturer of Dymista allergy medicine said it has not held merger talks as reported. Its shares climbed to their highest price in more than five years the day before after the 'Wall Street Journal' said that Sun Pharmaceutical Industries was discussing a $5bn (€3.8bn) takeover of the firm.

Austria's biggest steelmaker Voestalpine gained 6.1pc to €26.90 after it proposed to increase its dividend by 13pc to 90 cents a shares. It also reported that net income jumped to €444.9m in its last financial year.

Irish Independent

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