Thursday 22 March 2018

Irish stocks fall as bank stress tests cause worry

Colm Kelpie

Colm Kelpie

IRISH shares fell in line with the major European stocks by mid-afternoon yesterday.

The ISEQ Overall Index was down by lunchtime after three days of increases – by 0.98pc, or 43.91 points, to 4456.15.

The laggards in the Dublin market included both Allied Irish Banks and Bank of Ireland, which fell 7pc to 12 cents and 2.2pc to 27 cents respectively as Finance Minister Michael Noonan said the European Central Bank (ECB) had not yet nailed down the conditionality for next year's stress tests.

While he said there was a chance the banks may require more capital, it was the Central Bank's view that no additional capital would be needed.

Packaging giant Smurfit Kappa declined 1.7pc by mid-afternoon to €17.50 – a day after the outlook on the company's ratings had been raised to "positive" by Moody's, putting its view of the company's prospects in line with that of Fitch and Standard & Poor's.

It was also a bad start to the day for airlines, with Ryanair slipping 1.5pc to €5.70 and Aer Lingus dropping back 1.5pc to €1.42.


On the other side of the board, the leaders included insulation giant Kingspan, which increased 0.2pc to €13.15 and recruiter CPL Resources which increased 2.3pc to €6.55.

Exploration firm Providence dropped 0.7pc to €3.58.

Elsewhere, European stocks fell, posting the biggest two-day drop in a month as investors weighed corporate earnings and speculated that stronger economic data will spur central banks to pare their stimulus measures. US equity-index futures and Asian shares also retreated.

The Stoxx Europe 600 Index declined 0.6pc to 319.72 at 11.51am in London.

The UK's FTSE 100 was down 1.6pc at 2.04pm, while France's CAC40 had slipped 1pc, and Germany's DAX was down 0.9pc.

"We're near the end of the earnings season and it was half light, half shadows," Andreas Lipkow, a senior market strategist at Kliegel & Hafner AG in Berlin, said.

"In the next few days, jobless claims and manufacturing data out of the US will give more information about the Fed's plans. Everybody is guessing when tapering will begin and the market is nervous about this," Mr Lipkow added.

Carlsberg rose 2.3pc after reiterating its forecast for full-year profits.

Irish Independent

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