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EU growth forecast hits trading

IRISH shares fell yesterday, as a measure of economic output in the European Union was revised down, pointing to lower growth than had been thought.

By the close of trading the ISEQ Overall Index had fallen 1.57pc, or 51.25 points, to 3,214.56.

The index struggled throughout the session, with twice as many stocks falling as climbing. Trading finished with the market at its intraday low.

The composite purchasing managers' index (PMI) for services and industry was revised to show a lower than initially thought 49.3 points in February from 50.4 points in January. It was still up from 48.3 points in December. A number above 50 shows growth, under 50 shows contraction.

Mining company Kenmare Resources was one of the main laggards on the day, dropping 5.06pc to 66c. The company produced lower than expected amounts of illmenite at its Moma mine in Mozambique during January.

Ryanair dropped 0.95pc to €4.18. The airline reported a 2pc fall in passenger numbers during February.

Construction group CRH slid 1.35pc to €16.12. The firm gains more than half its revenue in the United States, where factory orders unexpectedly declined for the first time in three months.

Dropped

Few stocks made significant moves on the other side of the board, but Providence Resources continued its good run of form, surging 9.65pc to €4.85. The oil explorer is now up more than 96pc this year, as high oil prices and strong results from its testing of a field off the Cork coast boost its stock.

Elsewhere, European stocks dropped, snapping two days of gains, as China cut its forecast for economic growth this year and data showed manufacturing and services in the euro area shrank more than estimated. National benchmark indices declined in almost every western-European market except Switzerland and Iceland. France's CAC 40 Index slipped 0.4pc, while the UK's FTSE 100 Index fell 0.6pc. Germany's DAX Index lost 0.8pc. The benchmark Stoxx Europe 600 Index retreated 0.6pc.

"People are actually a little bit less pessimistic on the economic front than late last year, but clearly we would like to see more positive macro data going forward. We don't expect growth in Europe this year," said Edmund Shing, an equity strategist at Barclays Capital in London.

Glencore, the world's largest publicly traded commodities supplier, retreated 4pc. Net income excluding exceptional items in the six months ending December 31 last year was some $670m (€506m) behind the previous year.

Copper declined for a second day in London after China cut its target for economic growth.

Irish Independent