Business World

Thursday 28 August 2014

Markets cagey amid US drama

Colm Kelpie

Published 01/10/2013 | 05:00

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ALL eyes were on the US yesterday with markets across the world reacting nervously to the prospect of a partial US government shutdown.

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US, European and Asian stocks were all down, with political upheaval in Italy also weighing on investors.

The US government last night appeared to be heading for its first partial shutdown since 1996, after a weekend with no signs of negotiations or compromise from either the House of Representatives or Senate to avert it.

House Speaker John Boehner showed no sign of backing down from Republican insistence on linking a funding bill to a delay in President Barack Obama's healthcare law.

By the close in Dublin, the ISEQ Overall Index was little changed, down 0.1pc, or 2.5 points, to close the trading day at 4,238.28.

The leaders included speciality baker Aryzta, which closed up 4.1pc to €49.50 after the company reported revenues of over €3bn in the year to the end of July. That was the biggest rally in six months.

Aer Lingus was also up – 0.9pc to €1.52 – while food ingredients company Kerry Group also rose 1pc to €44.96.

On the other side of the board, Petronet was down 12pc to four cent, while drinks company C&C fell 0.9pc to €4 and insurance group FBD slipped 0.9pc to €14.90.

Elsewhere, European stocks declined the most in a month, trimming the best quarter in four years, as Italian Prime Minister Enrico Letta fought to save his administration.

The Stoxx Europe 600 Index fell 0.6pc to 310.46 at the close of trading, the biggest drop since August 30.

National benchmark indices retreated in all 18 western European markets.

The UK's FTSE 100 and Germany's DAX each lost 0.8pc, while France's CAC 40 Index slid 1pc.

"Risk appetite is on the retreat, driven by the political drama on both sides of the Atlantic," Witold Bahrke, a senior strategist at PFA Pension in Copenhagen, said.

UniCredit and Intesa Sanpaolo, Italy's biggest banks, dropped more than 1pc. (Additional reporting Bloomberg)

Irish Independent

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