Business Irish

Saturday 17 March 2018

European stocks down on Hammond's statement

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

Stocks across Europe were down yesterday as investors responded to UK Chancellor Philip Hammond's autumn statement which forecast that growth in Britain would slow to 1.4pc next year, down from the 2.2pc estimated previously. Mr Hammond also announced that the UK would borrow an extra £122bn between now and 2020 in a bid to support investment in the economy.

Lenders declined, with Royal Bank of Scotland Group and Standard Chartered down at least 1.3pc. National Express Group and FirstGroup advanced after Hammond said the UK will invest an additional £1.1bn (€1.4bn) in English local transport networks. United Utilities Group added 2.6pc after reporting an increase in first-half operating profit.

Foxtons, a broker focused on London, fell the most in five months and was the biggest loser on the FTSE All-Share Real Estate Investment & Services Index. The shares were down 14pc at 105 pence as of 2:23 p.m. Countrywide, the UK's largest broker, fell as much as 7.4pc and LSL Property Services dropped as much as 8.6pc, the most since July 22.

All of Europe's major indexes were down in mid-afternoon yesterday in the wake of Mr Hammond's announcement. The pan European Stoxx 600 fell back 0.52pc having risen earlier in the day as a result of EU figures which showed a rise in business activity in November.

London's FTSE 100 declined by 0.5pc, the German DAX fell by 1pc, while the CAC in France was down 0.8pc.

Ireland's Iseq overall index of Irish shares contracted by 0.43pc to 6,2427.18 - a loss of 27.04 points. The biggest losses of the day were absorbed by lender Bank of Ireland (-2.2pc), financial advisory firm IFG (-1.6pc) and building giant CRH (-1.6pc). There were gains for Permanent TSB (1.9pc, Hibernia Reit (1.5pc) and Aryzta (1.3pc).

In the US, the dollar strengthened and Treasuries retreated after better-than-estimated durable goods orders bolstered the outlook for quickening the pace of raising interest rates.

The dollar gained against all but one of its 16 major peers after orders for US business equipment climbed in October for the fourth month in the last five. The S&P 500 Index dropped after all-time highs for two straight days, while shares in Europe retreated. German bonds declined after Reuters reported the European Central Bank is looking at ways to lend out more bonds and avert a market freeze. Italian debt sank with bank shares.

Oil slipped, while gold futures dropped to their lowest rates since February.

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