Market takes fright over fears of war in Syria and rise in oil prices
Published 29/08/2013 | 05:00
IRISH shares fell yesterday as markets took fright at the possibility of western military action in Syria.
By lunchtime, the ISEQ Overall Index had slid 1.29pc, or 53.56 points, to 4,084.53.
The Dublin market fell in concert with other European markets but it was not helped by specific company news for a number of its members.
The macro story, however, was the rampant speculation that a number of western countries were poised to launch air strikes against the Syrian government in retaliation for an apparent chemical weapons attack.
UK Prime Minister David Cameron recalled parliament today to debate a possible attack, while the US is also poised to make a move. It was no surprise then to see a sell-off, while oil spiked to its highest price in two years.
Here in Dublin, Kenmare Resources was the main laggard. The rare-earths miner fell at least 9.9pc to 31c – its biggest fall in two months – after the company reported half-year results that missed forecasts and warned prices for its key products would remain lower for the foreseeable future.
Aer Lingus slumped 4.1pc to €1.63. Shares in the former flag carrier tumbled after UK regulators ordered rival Ryanair to cut its stake in Aer Lingus from nearly 30pc to only 5pc. Ryanair in turn dropped 2.2pc to €6.38.
Paddy Power dropped 1.8pc to €59. The bookmaker recorded its biggest intraday fall since May after its half-year results came in slightly lower than analysts had been hoping for.
CRH dropped 1.8pc to €15.41. The building materials giant gains about half of its revenue from the US, which is grappling with another budget row, while high oil prices will likely hit the company's input costs.
On the other side of the board, the big winner yesterday was set to be Providence Resources. The oil and gas explorer, which has been hammered in recent weeks, surged 7.3pc to €4.10. The stock's second significant gain in successive days.
Housebuilder Grafton Group jumped 5.2pc to €6.45, while fruit producer Fyffes rose 1.3pc to 73c.
It was a similar story elsewhere, as national benchmark indices dropped in all 18 western European markets, except Norway. London's FTSE 100 fell 0.6pc, while France's CAC 40 lost 0.5pc. In Frankfurt, the Dax tumbled 1.4pc, while the Stoxx 600 Index was down 0.8pc.
"The key thing we are worried about regarding Syria, but also Egypt, is a sharp rise in oil prices and how it has a potential to be a bigger problem for emerging markets in particular and then, potentially the West," said Norman Villamin, European chief investment officer at Coutts in Zurich.
Accor dropped 3.9pc. Europe's largest hotel operator said first-half earnings were lower than expected.