Saturday 18 January 2020

Biggest hit for Irish shares this year

Peter Flanagan

IRISH shares plunged the most since November yesterday as renewed fears of another recession in Europe and worries over Greek debt talks hammered stocks across the continent.

By the close in Dublin, the ISEQ Overall Index had slumped 2.9pc, or 93.27 points, to 3,132.57. That was the Dublin market's biggest percentage loss since November 1.

A report on eurozone GDP growth during the fourth quarter of last year confirmed a contraction of 0.3pc, while the group representing bondholders in talks with the Greek government over the country's debts said a disorderly default by Greece could trigger €1trn in losses across the eurozone. Only about 20pc of bondholders have signed up to a deal so far.

Six stocks fell for every one that rose on a day when there was little positive movement on the market.

Illmenite miner Kenmare Resources slumped 9.3pc to 60c. Kenmare previously reported lower-than-expected output from its mine in Mozambique during January.

Irish Life & Permanent dropped 8.5pc after Standard & Poor's put the lender's rating on "creditwatch with negative implications". The ratings agency said the possibility of authorities finding a "viable long-term solution" for the lender is "constrained".

Construction giant CRH tumbled 5.1pc to €15.30. The US Senate failed to put a time limit on a debate about plans to upgrade that country's motorway network, which could be lucrative for CRH. The company makes around half of its revenue in the US.

Away from Ireland, the eurozone data and Greek concerns weighed heavily on traders. National benchmark indices fell in all of the 18 western European markets except Greece.

The UK's FTSE 100 lost 1.9pc while France's CAC 40 dropped 3.6pc. Germany's DAX slid 3.4pc while the benchmark Stoxx Europe 600 Index fell 2.7pc.

"A lot of the good news is behind us," said Pierre Mouton, a fund manager at Notz Stucki in Geneva. "The economy in Europe can be a bit of a worry, but expectations aren't too high. Everyone is expecting bad numbers."

A gauge of banks accounted for the largest decline on the Stoxx 600, losing 4.2pc. Commerzbank lost 6.7pc. Societe Generale declined 7.8pc.

A gauge of mining-company shares slid 2.6pc as metal prices fell in London. Nyrstar lost 4.6pc. Eramet, a refined nickel producer, tumbled 6.6pc.

Aviva lost 4.7pc as Exane BNP Paribas lowered its recommendation for the UK's second-biggest insurer by market value to "underperform" from "neutral", saying the company's earnings will be lower and cash flows under pressure in the "current low-yield, low-growth environment."

The insurer is to report its financial results tomorrow.

Irish Independent

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