Business World

Monday 27 February 2017

Weaker than expected US jobs data sparks Europe-wide sell-off

Peter Flanagan

Peter Flanagan

People pass by the New York Stock Exchange (NYSE) in the financial district in the lower Manhattan borough of New York City
People pass by the New York Stock Exchange (NYSE) in the financial district in the lower Manhattan borough of New York City

Irish shares fell yesterday, as traders took flight following US jobs data that was much weaker than expected, casting doubt on the health of the world's biggest economy.

By the close in Dublin the ISEQ Overall Index had fallen 0.51pc, or 32.99 points, to close at 6,402.55.

The market had been trending up for the morning, but once the US data was published at lunchtime, markets went into freefall.

US employers added only 38,000 new workers in May - the fewest in almost six years - reflecting broad cutbacks that may raise concern about growth and prompt Federal Reserve policy makers to reconsider the trajectory of borrowing costs.

"That was very disappointing and adds a lot of uncertainty to a market that was gearing up for a summer rate hike from the Fed," said Allan von Mehren, chief analyst at Danske Bank in Copenhagen. "It makes people question the real strength of the labour market. Really terrible timing, as confidence was just tentatively returning to the market."

The banks struggled on the session, with AIB sliding 4.2pc and Permanent TSB dropping 2.97pc to €2.06.

Independent News & Media, the publisher of this newspaper, fell 8.5pc.

Few major players enjoyed positive trading yesterday. Insurer FBD climbed 2.8pc to €6.53 while speciality baker Aryzta gained 1.6pc to close at €36.56.

Elsewhere, the Stoxx Europe 600 Index fell 0.9pc. In Frankfurt the Dax Index slipped 1pc while the CAC 40 in Paris lost a similar percentage. In contrast, the FTSE 100 in London rose 0.4pc.

BP rose 1.3pc after agreeing to pay $175m to settle claims by US investors that its managers lied about the size of the 2010 Gulf of Mexico oil spill. BHP Billiton and Glencore rose 3.5pc as metals climbed.

Irish Independent

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