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China throws spanner in the works


Dublin-based bookmaker Paddy Power has seen its annual profits increase by 16 per cent

Dublin-based bookmaker Paddy Power has seen its annual profits increase by 16 per cent

Julien Behal

Dublin-based bookmaker Paddy Power has seen its annual profits increase by 16 per cent

IRISH shares slumped yesterday as poor data from China affected many of the major stocks on the market.

At the close of trading the ISEQ Overall Index had fallen 1.74pc, or 56.82 points, to 3,210.03.

The index spent most of the session in the red but fell off a cliff at the close, as a late sell-off sent shares tumbling.

Dragon Oil plunged 11.18pc to €6.72. Much of the oil and gas drilled in Turkmenistan, where most of Dragon's operations are located, is exported to China, which yesterday released worse than expected economic data.

China's economic growth eased to 8.9pc in the final quarter of 2011 from the previous year's double-digit expansion. The government's growth target this year is 7.5pc. The latest trade data show both Chinese and global demand weakening as the country posted its largest deficit in a decade, fuelling worries that Chinese demand for oil may be on the wane. Oil fell back 0.3pc to $106.41 a barrel.

The Chinese data forced most major stocks down. Illmenite miner Kenmare Resource slid 8.9pc to 59c. Conglomerate DCC lost 3.41pc to bring it to €19.13, while insulation firm Kingspan fell 4.65pc to €8.

Bookmaker Paddy Power dropped 2.76pc to €45.45 on the eve of the Cheltenham Festival, traditionally one of the biggest gambling events of the year. Few stocks beyond the food sector gained. C&C rose 2.58pc to €3.86. F&C Asset Management's Sam Cosh recommended the cider maker.

Elsewhere, European stocks retreated, halting a three-day rally for the Stoxx Europe 600 Index, as the Chinese data hit trading across the board.

National benchmark indices declined in 11 of the 18 western-European markets. Germany's DAX Index added 0.3pc. The UK's FTSE 100 Index and France's CAC 40 Index increased 0.1pc. The benchmark Stoxx Europe 600 Index fell 0.2pc.

"China really is the only potential negative out there," said Steve Goldman, managing director at Kapstream Capital in Sydney. "We've seen a good start to the year and there is a lot less risk to the global economy than there was three, four, five months ago."

Rio Tinto, the world's third-biggest mining company, lost 1.7pc, snapping three days of gains. Vedanta Resources declined 3.7pc. Carnival gained 1.5pc as Exane BNP Paribas and Numis Securities advised buying the shares. Computacenter surged 11pc, the biggest gain since May 2009. The supplier of computer services to companies is due to release full-year earnings this morning.

Game Group tumbled 64pc to 1.28p, the lowest level on record. The UK's biggest independent video-games retailer said it's having trouble securing games from suppliers for a second time this year as funding talks continue. The shares have plunged 83pc this year.

Irish Independent