Stocks retreat as concerns rise
Published 01/12/2010 | 05:00
IRISH stocks retreated again yesterday as Allied Irish Banks and CRH fell amid continuing concern that Europe's sovereign debt crisis is worsening.
The ISEQ Overall Index closed down 9.3 points, or 0.4pc, at 2646 points.
Credit-default swaps on Irish Government bonds surged to the highest levels ever. The euro fell to 10-week lows versus the dollar and the yen, as investors shunned riskier assets.
The declines came as Eurointelligence, an online commentary service, said markets were growing increasingly concerned about the solvency of eurozone peripheral states after focusing mainly on their short-term liquidity problems in past weeks.
"We at Eurointelligence consider a default of Greece, Ireland and Portugal a done deal," they wrote yesterday. "The question is only now whether Spain can scrape through."
National benchmark indexes fell in 15 of the 18 western European markets as Europe's debt crisis intensified and a report showed US home prices rose less than forecast in September.
The UK's FTSE 100 Index lost 0.4pc, while Germany's DAX Index slid 0.1pc and France's CAC 40 Index dropped 0.7pc.
BNP Paribas led foreign shares lower, falling for an eighth day as Italian and Spanish government bonds slumped.
Nestle lost 2.2pc as Credit Suisse cut its rating on the shares for the first time in almost six years. Hochtief gained 2pc after Actividades de Construccion y Servicios won approval for its €2.7bn bid for the German construction company.
The benchmark Stoxx Europe 600 Index swung between gains and losses before closing down 0.1pc at 261.83 in London. The measure declined 1.6pc in November, the first monthly drop since August.
"As long as we are facing debt risks in Europe, the market can drop further," Jens Finkbeiner at F+m Financial in Frankfurt, said.
Remy Cointreau lost 3.1pc after France's second-biggest distiller said first-half profit tumbled 65pc on a writedown of its Metaxa brand due to slumping sales in Greece.
Alstom gained 2.6pc as Deutsche Bank raised its recommendation on the world's third-largest power-equipment maker to "buy".