Business World

Sunday 11 December 2016

UK, French and German shares slide on uncertain backdrop

Published 26/01/2012 | 05:00

Traders work on the floor of the New York Stock Exchange, yesterday. US stocks rallied, erasing an earlier loss in the Standard & Poor's 500 Index, as the Federal Reserve said interest rates will remain low until late 2014 and Apple rallied after earnings more than doubled
Traders work on the floor of the New York Stock Exchange, yesterday. US stocks rallied, erasing an earlier loss in the Standard & Poor's 500 Index, as the Federal Reserve said interest rates will remain low until late 2014 and Apple rallied after earnings more than doubled

EUROPEAN stock markets remained edgy yesterday as new data showed that Britain is on the cusp of another recession and some major firms missed earnings estimates.

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Indices also yielded ground on an uncertain political backdrop. As world leaders descended on a snow-strangled Davos, Angela Merkel's government rebuffed suggestions from IMF head Christine Lagarde that the ECB should take a financial hit on its Greek-debt holdings.

The Balkan nation is hoping bondholders will shoulder massive losses as it tries to wipe out a large chunk of its crushing €350bn debt.

In Ireland, the ISEQ Overall Index see-sawed during the day, dropping below 2,960 points before regaining lost ground later. It ended the session just 4.26 points, or 0.14pc lower, at 2,982.64. It had sank below the psychologically important 3,000 mark on Tuesday after only recently breaching the barrier again after a tortuous slog that began last summer.

Significant movers yesterday included financial-services group IFG. It advanced 9.8pc, or 10 cent, to close at €1.12. The company was a takeover target last summer but the €231m move was abandoned due to market conditions.

Mining firm Kenmare Resources shed 1.7pc to close at 55.7 cent. The company said that it has contracts in place for its ilmenite ore for the first six months of 2012 at strong prices. However, an expansion of its facility in Mozambique is behind schedule.

Ryanair gained nearly 1.8pc, or 7 cent, to just over €4. That advance came even as the European Commission said it's investigating whether financial incentives, including rebates the airline received at two airports, could have given the airline an unfair economic advantage.

National benchmark indices fell in 15 of the 18 western-European markets yesterday. The UK's FTSE 100 slid 0.9pc, France's CAC 40 declined 0.8pc and Germany's DAX lost 0.6pc.

Drugmaker

Novartis fell 3.5pc to 50.20 Swiss francs for the largest contribution to the Stoxx 600's slide. The drugmaker said sales probably won't grow this year and profitability will be hurt as the drugmaker's biggest-selling medicine loses US patent protection.

Ericsson plunged 13pc to 59.30 kronor, its largest drop since 2008, after reporting fourth-quarter net income of 1.15bn kronor (€130m), missing analysts' estimates for profit of 4.24bn.

Banks retreated in Britain as the economy shrank more than forecast. Royal Bank of Scotland fell 3pc to 26.25p and Lloyds slid 3.8pc to 30.48p. Barclays slipped 1.7pc to 214.7p and HSBC declined 1.5pc to 532.2p.

The UK economy shrank in the fourth quarter more than economists had forecast as manufacturers cut output and services stagnated, leaving Britain on the brink of another recession. Bank of England policy makers voted unanimously this month to keep their target for bond purchases unchanged.

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