Monday 19 February 2018

Markets slip back on weak jobs and output figures

Peter Flanagan

IRISH shares slipped back yesterday, as poor jobs data from the US combined with weaker- than-expected industrial output in Europe to hold back the markets.

For the day, the benchmark ISEQ Overall Index lost 1.13pc, or 33.92 points, to close at 2,933.93. Although the index was down on the day, it posted a gain of 0.61pc on the week, having opened on Monday at 2,915.36.

Financial stocks led the drive down, with the week's poor results continuing to weigh on the sector. On Wednesday, Allied Irish Bank reported a €2bn H1 loss while Ulster Bank yesterday reported a loss of €261m for the six months to the end of June. Those results combined with the news that employment in the US had fallen by more than double what analysts estimated and German and UK industrial output dipping unexpectedly.

First Derivatives fell 7.89pc to €3.50 while Bank of Ireland dropped 4.83pc to 83c. Allied Irish Banks slipped 1.81pc to 98c.

Few stocks ended the day in positive territory. Recruitment company CPL Resources climbed 4.08pc to €2.50, while Merrion Pharmaceuticals continued its good week by posting a gain of 1.25pc, closing at €4.05.

Across Europe it was a similar story as traders digested US jobs data. National benchmark indexes fell in all 18 western European markets. The UK's FTSE 100 Index retreated 0.6pc, Germany's DAX lost 1.2pc and France's CAC 40 fell 1.3pc. The composite Stoxx 600 lost 1.1pc.

"The data's pointing to the recovery being very slow and protracted," said Gregor Smith, a fund manager at Daiwa Asset Management in London. "It's a bit of a surprise it's as weak as it was. It's going to feel pretty painful."

US Labour Department figures showed overall employment in the US fell 131,000 in July, missing the average forecast for a decline of 65,000. Unemployment held at 9.5pc while private payrolls that exclude government agencies rose by 71,000, missing economists' average forecast of 90,000.

In London, the declines were led by Lonmin, the world's third -biggest platinum producer, which lost 5.1pc after South Africa ordered the company to halt sales of non-platinum group metals.

Beverage companies SABMiller and Diageo dropped more than 2pc amid concern that Russia's ban on wheat and barley exports may further drive up the price of commodities used in beer production.

Irish Independent

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