Shares drop ahead of US jobs data
EUROPEAN stocks sank the most in more than three months yesterday, as investors waited for US jobs data due later this week, which may prompt the Federal Reserve to reconsider its stimulus.
In Dublin, Bank of Ireland shares fell sharply for a second day after the results of a balance sheet review were published by it on Monday.
The stock was down 2.88pc at 26.90 cents each by the end of the session yesterday, after falling 3pc on Monday.
On global markets the drop was a reaction to investors who now expect the Fed to start easing back its $85bn-a-month programme if Friday's US jobs numbers for November show encouraging growth.
"There's been a frenzy for European equities in the last three months and we're now waiting for a short-term consolidation," said Francois Savary, a Geneva-based wealth manager. A lot still depends on a few uncertainties in the US, such as fiscal and monetary policy, that have the potential to disappoint investors. Market psychology has been too optimistic for Europe and expectations for 2014 growth may be too high."
National benchmark indexes fell in all 18 western European markets. The UK's FTSE 100 lost 1pc, while Germany's DAX slid 1.9pc. The ISEQ Overall Index closed down 2.15pc or 96.62 points to 4405.98. A mere six companies listed on the index rose.
In Ireland, Donegal Investments led the gainers, up 5pc to €6.52, followed by Petroneft Resources, which rose 2pc to 6c. It was a good day for food companies: Glanbia rose 2pc to €11.10 while Origin added 1pc to €7.09
INM shares closed at 12 cents each, off recent highs, while Smurfit Kappa dropped 5pc to €16.43 each. It is the subject of a government 'intervention' in Venezuela where it is the biggest packaging company, a process than can involve additional inspections and audits.
AIB like BoI fell yesterday, down 5pc to 12 cents. European sentiment was also clouded by political worries, as President Viktor Yanukovych left Ukraine for a state visit to China amid protests about his decision to abandon an EU integration pact.