Monday 23 September 2019

European bourses sink on Asia sell-off

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)

European stock markets sank yesterday despite a survey confirming that eurozone businesses began 2018 by increasing activity faster than at any time in well over a decade.

But Asian equities had slumped before European bourses opened, hit by a decline in US shares on Friday.

In the eurozone, new orders have surged this year despite firms raising prices at the steepest rate in almost seven years.

IHS Markit's Final Composite Purchasing Managers' Index, seen as a good overall growth indicator for the eurozone, rose to 58.8 in January from December's 58.1 reading. Any figure above 50 indicates expansion.

It is now at its highest since June 2006 and well above the 50 mark that separates growth from contraction.

"The optimism reflects the strong economic upturn that the eurozone is experiencing, which continues to be broad-based and is set to continue in the months ahead," said Bert Colijn at ING, adding that backlogs of work are increasing and job creation is "very strong".

In Ireland, the ISEQ Overall Index tumbled 1.9pc, shedding 130.49 points to close at 6,754.74.

Ryanair was one of the main movers of the day.

It issued strong third-quarter results, but CEO Michael O'Leary warned of a tough summer fare environment and gradually rising fuel costs. Shares in the airline closed 2.4pc lower at €15.74.

Shares in Swiss-Irish food group Aryzta continued their downward trajectory following its profit warning last week. In Zurich, they were 2.5pc lower at 24.78 Swiss francs.

The UK's FTSE-100 fell 1.46pc, while France's CAC-40 was 1.48pc lower. Germany's DAX declined 0.76pc.


Irish Independent

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