Shares tumble amid fears US economy is spluttering
European stocks have their worst day since November but Glanbia surges after €107m acquisition in US
Published 20/01/2011 | 05:00
IRISH shares tumbled in tandem with shares elsewhere amid concerns that the US economy is spluttering. Glanbia surged after issuing better-than-expected results and buying a company in Florida.
The ISEQ shed 38.62 points, or 1.3pc, to close at 2,893.57 points.
Among the decliners were Allied Irish, which fell 4.1pc to 28c, and Ryanair, which closed down 2.4pc at €3.73 as oil prices rose and a Spanish court ruled that it could not charge customers €40 for turning up at an airport without a ticket.
DCC was down 1.7pc at €22.90 as UK company Kesa, which owns electrical retailers Comet in England and Darty in France, said profit would be towards the lower end of market expectations. DCC supplies both chains. Shares in Kesa fell 9.8pc in London.
Glanbia went against the flow, jumping 3.3pc to €4.08, as it said it expected earnings-per-share growth of around 20pc for last year and added that it had bought a US nutrition business for around €107m.
Yesterday's gains left the shares at their highest level in more than two-and-a-half years.
European stocks had their worst day since November after a report said the US building industry started work on fewer homes than projected and Goldman Sachs posted earnings that failed to beat analysts' estimates.
European stocks extended their losses as an economic adviser to the German government was cited as saying Europe's largest economy should set aside funds to prepare for a Greek default in an interview with the 'Handelsblatt' newspaper.
National benchmark indexes fell in 14 of the 18 western European markets. France's CAC 40 Index and Germany's DAX Index each dropped 0.9pc. The UK's FTSE 100 Index lost 1.3pc. Greece's ASE Index posted the best performance, rising 4.5pc.
"There's a bit of a dance going on, the indexes go up and hit new highs and then pull back as nervousness creeps in," said Karen Olney, head of thematic strategy at UBS.
ASML sank 6.8pc as investors speculated that the company's growth would slow in 2011.
Europe's biggest semiconductor equipment maker posted fourth-quarter profit that beat analysts' estimates, with 2010 sales rising to a record.
British bookie William Hill surged 7pc, its biggest gain in 15 months, after the company reported that fourth-quarter sales at its betting shops rose 8pc.
Pearson surged 4.5pc, its highest price in eight months, as the owner of the 'Financial Times' and Penguin books raised its 2010 profit forecast for the third time, citing growth in emerging markets and digital services.
Italy's Banca Popolare di Milano gained 5.2pc as Deutsche Bank lifted its recommendation to "buy" from "hold". The brokerage said the stock was "currently undervalued", and the lender's "solvency ratios seem solid enough to avoid a capital increase".