Business World

Wednesday 20 September 2017

Mixed day as all eyes are on Brussels

John Mulligan

John Mulligan

IT was a mixed -- though largely negative -- day for European stock markets yesterday as EU leaders descended on Brussels for a summit where they'll have yet another stab at trying to solve the bloc's economic woes.

"We expect these discussions to draw a road map for fiscal, financial and political union, but we do not anticipate any major decisions on concrete short-term measures to reduce market stress beyond what has already been agreed," said Guillermo Felices and Sara Yates, of Barclays in London.

While the CAC and FTSE both sank yesterday, it was Germany's DAX that suffered the most. The country's unemployment rate climbed this month -- the fourth time this year. The increase of 7,000 was more than twice that which had been expected by economists.

The ISEQ Overall Index just managed to nudge into positive territory by the end of the session, having dipped for most of the day. It closed up 6.57 points, or 0.21pc, at 3,072.80.

Among the movers were Paddy Power. It fell almost 0.9pc to €52. UK rival Ladbrokes said yesterday that a decline in online profit will be worse than predicted because of poor gambling margins and delays to technology upgrades. Its stock slumped 12pc to £152.7 in London.

Smurfit Kappa advanced a further 2.57pc, or 13c, to €5.18. It followed an upgrade to the stock on Wednesday by Goldman Sachs.

Kenmare Resources added 6.1pc, or nearly 3c, to €49.4, while insulation maker Kingspan rose 1.6pc, or 10c, to €6.40. Donegal Creameries fell 4.9pc, or 17c, to €3.30, while Aer Lingus dropped 2.3pc, or 1.4c, to €1.03. Ageas jumped 9pc to €1.47.

National benchmark indices declined in nine of the 18 western European markets. The UK's FTSE 100 Index lost 0.6pc, France's CAC 40 Index slid 0.4pc and Germany's DAX Index retreated 1.3pc.

Barclays plunged 16pc to 165.6p, its biggest decline since March 2009, as a gauge of European lenders posted the biggest drop on the Stoxx 600, losing 2.4pc.

Pressure

Barclays CEO Bob Diamond came under pressure to resign after the second-largest bank by assets was fined £290m (€360m) for attempting to manipulate the interbank lending rate, known as Libor.

"We expect the cost of lawsuits related to Libor manipulation will dwarf the fines imposed on Barclays," said Sandy Chen, a banking analyst at Cenkos Securities in London.

"Since RBS, HSBC and Lloyds have also been named in lawsuits, we expect they will also face significant fines and damages."

Royal Bank of Scotland declined 11pc to 206.4p, HSBC slid 2.6pc to 558.2p and Lloyds sank 3.9pc to 29.94p.

Irish Independent

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