Stocks take hit as debt woes give investors scare
Published 24/09/2010 | 05:00
SLUGGISH European manufacturing data, rising bond yields in Ireland and surging jobless claims in the US all contributed to falling stocks in most key markets.
The ISEQ dropped 1pc to 2685 points as concern grew over both economic growth in Ireland and the future of the banking sector, notably Anglo Irish Bank. Bank of Ireland fell sharply by 5.5pc to 60 cent. AIB was down 5.5pc, too, and Irish Life & Permanent (IL&P) also shed 4.7pc.
In the UK, stocks slid for a third day, amid renewed concern that some European countries may struggle to repay their sovereign debt.
Shares from Kingfisher to Aggreko and Lloyds Banking Group fell in London trading. The FTSE 100 Index lost 0.1pc to 5547 at the close in London, paring some losses in late afternoon trade. The gauge fell as much as 1.4pc as the cost to insure Ireland's debt rose to a record high. The FTSE All-Share Index slid 0.1pc.
"The familiar spectre of potential debt problems in the eurozone and the slowing economic recovery have given investors a little scare," said London-based David Jones, a market strategist at IG Index.
Ireland led a surge in European sovereign credit-default swaps as investors speculated that Anglo Irish Bank won't pay back bondholders in full.
Contracts on Ireland jumped 23 basis points to 487 points.
Stocks pared losses from earlier after a measure of US leading indicators rose in August more than forecast, suggesting the world's largest economy may keep expanding through early next year, while a separate report showed home sales grew.
The better-than-estimated data overshadowed a report that showed an unexpected increase in jobless claims, a sign companies remain cautious about hiring as growth slows in the world's biggest economy.