Thursday 23 November 2017

Commodity stocks give up gains

Peter Flanagan

Peter Flanagan

IRISH stocks fell yesterday, as concerns that Ireland and other peripheral nations may struggle to pay their debts weighed heavily on the markets.

The ISEQ Overall Index lost 0.57pc, or 16.08 points, to close at 2,807.86. The index is down more than 6pc since the middle of last month.

Rumours swept trading floors across the world yesterday morning that Allied Irish Banks would not pay a coupon later in the week -- something that AIB had to formally deny. The rumour helped push the Irish/ German two-year yield spread to its highest level since the launch of the euro.

Portugal was also front and centre amid speculation the government may fall, triggering a crisis that would result in a bailout from Europe.

Despite the rumour, AIB barely moved for much of the day, closing down 0.5pc at 20c. Bank of Ireland slumped 6.31pc to 28c, but traders said the stock's move was not alarming.

"It could be flat on the day within a few minutes; we're talking a quarter-penny stock here," one dealer said.

Irish Life & Permanent added 1.53pc to touch 67c.

Commodity stocks fell back after Monday's gains, with Providence Resources losing 1.56pc to end the day at €3.56, while Kenmare Resources slumped 4.56pc, finishing the day at 45c.


Petroceltic also lost ground from the start of the week, slumping 5.56pc to 13c.

There were some winners but they were mostly among the smaller, less liquid stocks. CPL Resources added 5.4pc to close on €2.90, while Fyffes gained 1.2pc.

It was a similar situation across Europe, with national benchmark indexes falling in 15 of the 18 western European markets.

The UK's FTSE 100 slipped 0.4pc, France's CAC 40 retreated 0.3pc and Germany's DAX lost 0.5pc. The Stoxx Europe 600 Index slid 0.2pc.

"The likelihood that the Portuguese government will fall this week looks high," JPMorgan Chase economist Nicola Mai wrote. "This suggests that the sovereign will likely access" the European Financial Stability Facility "in the near term".

Banco Espirito Santo led a sell-off in Portuguese banks, falling more than 2.5pc.

Metro lost 4.7pc, the biggest decline since May after Germany's largest retailer said political turmoil in the Middle East and Japan's earthquake posed risks to economic growth.

In London, advertiser WPP lost 1.8pc as Exane lowered its stance on the shares to 'neutral' from 'outperform', saying the premium investors needed to pay to buy the stock relative to its peers was no longer justified.

BHP Billiton, the world's biggest mining company, slipped 1.3pc. Rio Tinto, the third-largest, dropped 1.1pc.

Irish Independent

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