Tuesday 20 March 2018

Central bank concerns persist

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)

Sean Duffy/Reuters

Markets across Europe were down again yesterday as concern continued over the capacity of central banks to add stimulus to stagnating economies.

Bond yields rose for a second straight day, albeit at a much slower rate than that seen in Monday's trading.

The CAC lost 1.1pc in France, while the German DAX was down 0.3pc. In London, the FTSE 100 lost 0.4pc.

In Dublin, the ISEQ overall index of Irish shares fell by 0.44pc, closing down 29.96 points at 6111.06.

Shares in online retailer Datalex rose by 2.7pc, while investors appeared unconcerned by the news that IFG are to replace ceo Paul McNamara; the group's shares rose by 2.6pc despite yesterday's surprise announcement.

The day's laggards were Bank of Ireland, which lost 3.1pc; insurance group FBD, down 2.1pc; and hotel group Dalata, whose stock dropped by 2.2pc.

British inflation unexpectedly held steady in August despite a big rise in the cost of imported raw materials after June's vote to leave the European Union, keeping the prospect of another Bank of England rate cut in play.

Consumer price inflation stayed unchanged at 0.6pc, a contrast to fuel and material costs for factories which rose at their fastest rate in nearly five years, up 7.6pc on a year earlier, official figures showed.

"Despite this downside surprise... we still see signs that inflation is pushing higher," Elizabeth Martins at HSBC said, citing the biggest monthly rise in food prices in 2-1/2 years and rising transport costs after 18 months of deflation.

On commodity markets,the price of Brent crude dropped further yesterday to $45.06 a barrel, a fall of 2.6pc.

Irish Independent

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