Negative sentiment pulls down shares
IRISH shares fell as negative sentiment across the continent pulled down shares almost everywhere as a slump in a UK house-price gauge fuelled concern that the equities rally has outpaced prospects for the economy.
The ISEQ ended the session down 13.68 points, or 0.5pc, at 2709.45 points as stocks such as CRH and the banks posted declines. Cider maker C&C gained after a solid set of first half results and signs that a three-year slump in the UK market may be coming to an end.
National benchmark indexes fell in 16 of the 18 western European markets. The FTSE 100 declined 0.2pc and Germany's DAX slipped around 0.1pc. France's CAC 40 Index lost 0.5pc as workers demonstrated for the fourth time in five weeks against the government's overhaul of the pension system.
In Dublin, CRH fell 2.2pc to €12.22 as traders worried about their exposure to the global economy. "We are pretty cautious on equities," said Richard Cookson, global chief investment officer at Citigroup's Private Bank in London.
Both the banks pared Monday's gains while Irish Life & Permanent posted the smallest decline among the country's lenders amid reports that it is hiring four banks to underwrite a rights offering. The share sale would help the lender to buy EBS Building Society and then merge it with Irish Permanent.
European stocks also retreated with the benchmark Stoxx Europe 600 Index falling 0.3pc to close at 262.48 in London as more than three stocks fell for every two that rose. Investors were concerned after a survey of UK real-estate agents and surveyors showed price expectations fell to minus 41, the lowest level since March 2009.
Punch Taverns, the largest UK pub owner, tumbled 11pc after reporting a £218m impairment charge.
In New York, the Dow trimmed its loss and the S&P 500 inched higher during early afternoon trading as details from the latest Federal Reserve meeting showed the US central bank is ready to flood the markets with cheap cash in support of a waning economic recovery.
A move from the Fed is all but priced into the stock market. In their September meeting, Fed policy-makers hinted that the timing of any action could be soon as the minutes of the meeting said they felt further monetary easing could be appropriate "before long".
Increased hopes that the Fed would step in to bolster the economy helped support stocks in recent weeks. The S&P 500 index is up 11.3pc since the start of September, and last month's performance was one of the best months for stocks in a decade.
China's bid to cool down its economy offset the Fed's resolve, as it sparked concerns it could crimp global growth. A Chinese newspaper reported the government raised bank reserve requirements by 50 basis points due to excessive lending.