Business World

Sunday 24 June 2018

European shares slide despite positive Eurozone factory data

Traders watch, as a television displays the news about former US national security adviser Michael Flynn, at the New York Stock Exchange, (NYSE)
Traders watch, as a television displays the news about former US national security adviser Michael Flynn, at the New York Stock Exchange, (NYSE)

Reuters

European shares fell yesterday despite strong Eurozone factory data, after a delay to a keenly awaited US tax reform bill curbed appetite for the dollar and was set to cool a rally on Wall Street.

Eurozone shares, which started to accelerate losses about half an hour before the release of the data, fell as much as 1.2pc to session low before stabilising down about 0.7pc.

A purchasing managers' index showed that Eurozone factories had their busiest month for more than 17 years in November and raised prices at the fastest rate in more than six years. Forward-looking indicators suggested the momentum would continue to the end of 2017, capping what is expected to be the best year for Eurozone economic growth in a decade.

At home, Merrion Stockbrokers reigned in its recommendations on AIB and FBD shares. "FBD has rallied by 13pc since we recommended it as a 'buy' as recently as 24 October.

"Valuations are now fair with the stock trading at 1.4 times its book value and expected to report a 10pc-11pc return on equity," Merrion said. The stockbroker cut its recommendation on AIB to "market perform".

"Given that AIB's valuations now look fully valued once again, we downgrade our recommendation to market perform".

Elsewhere, the euro edged higher for a third consecutive yesterday as investment flows propped up the single currency, although some weakness in stock markets prompted investors to take profits at higher levels.

Irish Independent

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