Storm takes its toll on insurers
Published 30/10/2012 | 05:00
THE first enforced closure of Wall Street since the September 11 attacks, this time because of Hurricane Sandy, dominated market news yesterday.
The Irish stock exchange was open for trading, despite the bank holiday here, but to little effect.
The US storm shock, the holiday here and traditionally slow UK trading in the week of mid-term holidays combined to put a big damper on activity.
The ISEQ index of Irish shares closed down 15 points, or 0.4pc, to 3,227.
Few names saw big moves on the day. Aer Lingus, whose flights are affected by the US weather crisis, was among the main movers. Shares in the airliner closed down almost 1pc at €1.03 each.
Shares in Irish companies with US interest tended to be down, including baker Aryzta, down 2.6pc at €37.50. Kerry and CRH were both down by close to a third of one per cent.
Elsewhere in Europe stocks fell, led by insurers in anticipation of a surge in claims once Hurricane Sandy has run its course.
Political jitters in Italy also undermined confidence.
Reinsurers Swiss Re and Hannover RE led a weaker European insurance sector index as the market tried to predict the cost of cleaning up after Hurricane Sandy.
"We are seeing insurers slide and we've sold a bit of Aviva and RSA," Ed Woolfitt, head of trading at Galvan Research, said.
"(It's all) tentative at the moment until we can gauge how much of an impact it is really going to have.
"The eurozone issue is still bigger in our eyes at the moment."
Italy's Milan stock market was the worst performer in western Europe, weighed down by banks, which have the largest exposure to the country's debt.
"If Berlusconi pulls the plug, we can have a pretty difficult autumn but central banks have all the power they need to stop (contagion)," a London-based volatility trader said.
"I'm long (volatility) because it's usually okay to buy at these levels, but I would sell any spike because no one seems to expect equity markets to tumble."
Adding to the worries was a profit warning from Japan's Honda Motors. It triggered a sell-off in the European auto sector yesterday, with France's Peugeot shedding 7pc and Germany's Daimler down 1.8pc.
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