Business Irish

Thursday 13 December 2018

Sanctions dent Europe share recovery

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York

Julien Ponthus

Further US sanctions on Russian interests hit Europe-listed stocks on Monday, denting a recovery as investors became more hopeful a trade war between the United States and China could be averted.

The pan-European STOXX 600 index ended the day up just 0.1pc as sanctions that included a blacklisting of aluminium giant Rusal sent mining stocks spiralling lower.

Resilience among financials stocks was just enough to keep the market in positive territory.

Basic resources stocks sank 1.7pc, as a sector that has already seen sharp declines as a result of trade tensions hit its lowest level in four months.

"Everything gets sold off in this environment," said John Meyer, mining analyst at SP Angel. "The US list may not be the final list and it feels like there will be more sanctions so investors do not know which, if any, stocks to hold."

Stocks linked to allies of Russian President Vladimir Putin suffered sharp declines. London-listed shares in En+ Group, which manages the assets of Russian tycoon Oleg Deripaska, sank 42pc after the US sanctions blacklist targeted the magnate whose business empire has a global footprint.

The stock has lost more than half its value since last Friday's open, with management saying the sanctions were "highly likely" to materially affect the business and prospects in an adverse way.

Shares in Swiss pump maker Sulzer and technology group Oerlikon were also sharply down, falling 8.5pc and 8.4pc respectively after their majority holder Viktor Vekselberg appeared on the sanctions list.

Companies with significant operations in Russia were also punished.

Irish Independent

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