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European stocks weaker as dollar soars

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Bank of Ireland fell 3.75pc

Bank of Ireland fell 3.75pc

Bank of Ireland fell 3.75pc

European stocks fell for a second day as oil and gas shares dropped and concern grew that the Federal Reserve is nearing an interest rate increase, and the euro declined further against the dollar.

The Stoxx Europe 600 Index lost 0.9pc to 389.66 at the close of trading. In Dublin the ISEQ closed down at 5915.94.

In Dublin, Providence Resources led the decliners. The stock closed down 12.23pc at 33 cents a shares after the company said planned drilling had been delayed at the Spanish Point prospect off the Irish coast.

The shares are down 68pc since the start of the year.

Bank of Ireland fell 3.75pc to 33.4 cents a share, giving up recent gains. AIB, seen as already over valued by experts, closed up a further 7.4pc at 10.5 cents.

In Europe all 19 industry sectors fell, with energy shares dropping the most. Royal Dutch Shell, BG Group and BP dropped more than 3pc each as crude oil fell for a fifth day amid signs a global supply glut will persist.

The Stoxx 600 had climbed on Friday to a seven-year high as the European Central Bank set a start date for its government-bond buying programme. It has jumped 14pc this year.

"There's more volatility coming, that's for sure," said Alessandro Bee, a strategist at Bank J Safra Sarasin in Zurich.

"With equities at these levels and after such a great run, the major risk is that interest rates rise sooner or more quickly in the US that we think. A rebound in oil prices is hard to imagine. It's a political game, and the oversupply will still be there for a long time."

In the US, the Standard & Poor's 500 Index wiped out its gains for the year, while the dollar strengthened to near a 12- year high versus the euro, amid speculation about a rate increase.

Irish Independent