Rating woes drag down ISEQ
IRISH shares fell as Allied Irish Banks plunged after Fitch Ratings downgraded the bank's government-guaranteed notes following the rating agency's downgrade of the country's credit rating yesterday.
The ISEQ fell 19.95 points,or 0.7pc, to 2719.77 points as Allied Irish tumbled 8.5pc to 41c. Fitch downgraded the government-guaranteed notes of AIB, Anglo Irish Bank, Bank of Ireland, EBS and Irish Nationwide Building to A+/F1 from AA-/F1+. Irish Life & Permanent, which did not get a downgrade, saw shares jump 4.7pc to €1.56 in an otherwise dull session in Dublin.
European stocks closed little changed as a record drop in UK house prices offset an unexpected decrease in initial claims for US jobless benefits. The Stoxx Europe 600 Index slipped less than 0.1pc to 262.31 at the 4:30pm close in London. The gauge rallied 6.7pc in the third quarter as concern eased that a slowing pace of economic growth in China and the US would curb corporate profits.
"The market has consolidated gains after performing really well," said Nicola Trivelli, who helps manage about $4.2bn (€3bn) as chief investment officer of Sella Gestioni in Milan.
National benchmark indexes advanced in 13 of the 18 western European markets. Germany's DAX rose 0.1pc and France's CAC 40 gained 0.2pc. The UK's FTSE 100 dropped 0.3pc as September house prices plunged the most since at least 1983. The average cost of a British home fell 3.6pc from August, according to Halifax, the mortgage lending division of Lloyds. There was no surprise at the European Central Bank's decision to keep rates unchanged and no relief rally.
In the US, government figures showed applications for unemployment benefits fell last week to the lowest level in three months, indicating companies are slowing the pace of firings.
Volvo fell 5.3pc and Renault surged 8.5pc as France's second-largest carmaker sold a 14.9pc stake in the Swedish truckmaker. Kazakhmys, Kazakhstan's biggest copper company, retreated 5.6pc as an investor sold shares. Man Group, Actelion and Germany's Demag Cranes soared more than 5pc amid takeover speculation.
Halfords tumbled 8.7pc for the biggest decline in the Stoxx 600 after the UK's largest retailer of car parts and bicycles said same-store sales fell 4.1pc in the first half.
HeidelbergCement, the world's third-largest cement maker, tumbled 4.7pc. Lafarge, the biggest cement maker, sank 4.6pc. "The market is a bit nervous about negative pricing in the US" following comments at an industry conference today, said Tim Cahill, an analyst at Davy Stockbrokers.
Meanwhile, Marks & Spencer, the UK's largest clothing retailer, rallied 4.9pc after reporting second-quarter sales growth that beat analysts' estimates as the company won market share in clothing.