Thursday 16 August 2018

Europe shares sag after diplomat ousted

The German share price index, DAX board, is seen at the stock exchange in Frankfurt
The German share price index, DAX board, is seen at the stock exchange in Frankfurt

Helen Reid

European shares closed firmly in negative territory yesterday as the euro rose against a faltering dollar after US President Donald Trump fired Secretary of State Rex Tillerson.

The pan-European STOXX 600 ended the session down 1pc, with Frankfurt's DAX and its German exporter constituents taking the worst hit, down 1.6pc.

The ISEQ fell.

The eurozone currency, a rise in which typically hurts European blue-chip companies, climbed about 0.5pc against the dollar yesterday.

"There is the Tillerson effect and there's the euro-dollar effect," said Oddo Securities trader Mikael Jacoby, noting that investors probably saw Mr Tillerson's removal as a good reason to take some profits after six trading days of gains.

The departure of Gary Cohn as President Trump's top economic adviser and worries about a possible global trade war had already sent jitters through global financial markets.

"What we are seeing here is that those people in the US administration in the more moderate line of thinking are being ousted, so this adds to the concerns the more radical forces are gaining some ground," said Rabobank's head of macro strategy, Elwin de Groot.

The utilities sector retreated 0.25pc, with losses limited by demand for German utilities RWE and E.ON as they plan to divide up the assets of power firm Innogy.

E.ON got a further boost and posted the second best-performance of the STOXX 600, up 3.9pc after it said it would raise its dividends for 2018 and 2019.

French telecoms company Iliad fell 9.9pc after missing market forecasts due to losses related to its launch in Italy.

(Reuters)

Irish Independent

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