Business Irish

Saturday 24 February 2018

ISEQ struggles as Spanish and US fears spook markets

Peter Flanagan

Peter Flanagan

IRISH shares ended the week on a negative note as poor jobs data out of the United States combined with renewed fears about the future of Spain hit markets across Europe.

By the close of trading, the ISEQ Overall Index had shed 1.29pc, or 41.52 points, to close at 3,173.15. The market went on a steady downward trend from the opening, and only a very brief rally late on kept it from closing at its intra-day low, as 17 stocks fell and only 10 rose. Still, the market posted a small gain for the week, having opened on Monday at 3,161.

In the US, employers hired fewer workers than forecast in June, showing the labour market is making scant progress towards reducing joblessness.

Payrolls rose 80,000 last month after a 77,000 increase in May, missing estimates by a fifth, while the unemployment rate held at 8.2pc. Private employment rose 84,000 in June, the weakest in 10 months.

That data, combined with continued doubts over Spain's ability to avoid a sovereign bailout, spooked markets with the yield on 10-year bonds spiking again to close to 7pc.

Losses were spread across a wide sector of society, but financials struggled for the most part.

Allied Irish Banks fell 5.71pc to 7c after it announced further plans to reduce its cost base in the future. The hobbled lender will close a number of rural branches and combine operations with An Post in a number of areas.

Bank of Ireland also fell, sliding 3pc to 10c. The lender is expected to cut interest rates on the back of the European Central Bank's decision to reduce its benchmark rate to a historic low on Thursday.

Commodity stocks for the most part performed strongly, despite oil prices sliding nearly 3pc. Providence Resources surged 8.2pc to €7.25 after a bullish analyst report from the London investment house Liberum Securities.

Dragon Oil added 1.27pc to also reach €7.25 after the explorer won an exploration licence in Afghanistan. Independent News & Media had a particularly strong day, rising 7.44pc to 23c a day after appointing a new director to its board.

Stocks declined elsewhere, as national benchmark indices fell in 16 of the 18 western European markets.

Germany's DAX and France's CAC 40 each declined 1.9pc. The UK's FTSE 100 lost 0.5pc. The benchmark Stoxx Europe 600 Index lost 1pc.

Irish Independent

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