Wednesday 24 January 2018

Euro strength dents European stocks

Traders work in front of the German share price index, DAX board, at the stock exchange in Frankfurt
Traders work in front of the German share price index, DAX board, at the stock exchange in Frankfurt

Reuters

European shares fell yesterday in a broad sell-off as the euro strengthened after ECB chief Mario Draghi did not express concern about a strong currency in a speech that was closely watched.

While London was closed for a holiday, reducing activity, the broad STOXX index for Eurozone stocks fell as much as 0.7pc to a two-week low. By the close, the Euro Stoxx 50 was 0.51pc lower.

In his speech at a symposium of central bankers at Jackson Hole, Draghi held back from talking down the currency, sending the euro to a two-and-a-half-year high against the dollar.

"The Jackson Hole meeting has been explosive for the euro and the US dollar traders," said London Capital Group analyst Ipek Ozkardeskaya.

"The strong euro is weighing on the European stock markets. Tapering talks could further demoralise stock traders on the run-up to the ECB verdict," she said.

Eurozone shares hit their highest point in more than two years in May, as strong macro data and company results drew heavy inflows in the region, but the recent surge in the euro has weighed.

Ireland's ISEQ Overall Index fell 0.61pc. Shares in drinks maker C&C shed 1.78pc to €2.92, while CRH retreated 1.48pc to €29.22. Travel software firm Datalex rose 1.3pc to €3.80 and Ires Reit advanced 1.5pc to €1.36.

Germany's DAX fell 0.37pc and France's CAC-40 lost 0.48pc.

Almost all sectors suffered losses yesterday with materials the biggest drag on the region's equities.

Reinsurance stocks suffered after flooding triggered by Tropical Storm Harvey devastated Houston. Shares in Hannover Re were down 2pc and Munich Re fell 1pc.

Irish Independent

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