Wednesday 13 December 2017

Shares driven down by disappointing US jobs data

Peter Flanagan

Peter Flanagan

IRISH shares ended the week down as poor jobs data in the US drove markets lower.

Yesterday the ISEQ Overall Index lost 0.78pc, or 23.16 points, to close at 2,940.50. That meant a 0.82pc loss on the week, having opened on Monday at 2,967.55.

CRH was the major casualty on the day, losing 1.26pc to close at €14.48.

Official figures show that US employment rose by far less than had been expected in May to record its weakest reading since September, while the jobless rate rose to 9.1pc.

High energy prices and the effects of Japan's earthquake also bogged down the US economy -- a key market for CRH.

Employment rose by 54,000 last month, the US Labour Department said. This was well below economists' expectations for a 150,000 increase.

Bank of Ireland ended a volatile week by losing 13.33pc after it released details of its capital-raising plans, which include the so-called "burning" of subordinated bond holders.

Yesterday, BoI said it would hold a rights issue underwritten by the Government at 10c a share.

It was the only lender to fall yesterday. Irish Life and Permanent rose slightly, while Allied Irish Banks was unchanged.

The loss by CRH and BoI were significant enough but a 2.05pc slip by packaging company Smurfit Kappa and a 2.08pc loss by Kingspan added to the market's woes.

There were some winners on the day. Paddy Power added 1.34pc after reports that there would be late-night opening for betting shops on certain days over winter, while Ryanair claimed 0.72pc to close at €3.64.

Elsewhere, national benchmark indices fell in eight of the 17 western European markets trading yesterday. Germany's DAX Index rose 0.5pc, while the UK's FTSE 100 Index gained 0.1pc and France's CAC 40 Index was little changed. The Stoxx 600 lost 0.4pc.

EON and RWE, Germany's biggest utilities, declined 1.2pc and 2.7pc, respectively.

Germany's four largest electricity companies will lose about €3.5bn in sales per year from the permanent shutdown of eight out of Germany's 17 nuclear-power plants. In London, Intermediate Capital Group lost 6.2pc as Credit Suisse Group cut its price estimate and said: "Headwinds are on the horizon."

Go-Ahead advanced 2pc and Stagecoach rallied 3.8pc as JPMorgan rated the shares "overweight" in new coverage.

IP Group rose 1.2pc on news that it would issue new stock to accelerate its investment in start-up businesses.

Irish Independent

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