Eurozone worries and Ryanair's results cause sharp falls in indices
POOR results from Ryanair and renewed concerns about the eurozone debt crisis triggered sharp falls in Irish and foreign indices yesterday, with some analysts and investors seeing little on the horizon to tempt investors back into the market.
Global stocks sank the most in two months, Irish bonds tumbled, the euro slid to a record low versus the Swiss franc, and commodities plunged amid signs that Europe's debt crisis is worsening and the economic recovery may be slowing.
The benchmark ISEQ Overall index ended at its lowest closing level for several months, off 58.48 points, or 2pc, at 2909.26 points, as index heavyweight Ryanair took a pounding. The ISEQ turned in its worst performance since March, while Ryanair's drop was its worst in two years.
Shares in Ryanair tumbled 5.3pc to €3.36, after Europe's biggest discount airline said it will cut capacity for the first time in its history as higher fuel costs bite. The pain was not limited to discount airlines. Aer Lingus fell even further, closing down 7.1pc at 78.5c.
International Consolidated Airlines Group, the parent of British Airways, sank 4.7pc and the Air France-KLM Group slid 4.4pc as Iceland's weather office said ash from a volcanic eruption may reach the UK this week, threatening transatlantic traffic.
The banks were hit by renewed jitters about the eurozone's sovereign debt crises with Bank of Ireland, Allied Irish and Irish Life & Permanent all slipping more than 5pc.
Standard & Poor's cut its outlook for Italy to "negative" from "stable" over the weekend, while the annihilation of Spain's ruling Socialist party made investors worry about the political will to implement further austerity measures.
"The week is starting in a decidedly fearful mode," Kit Juckes, head of foreign exchange strategy at Societe Generale in London, wrote in a report. The change of outlook on Italy also "amplifies the risk for contagion," he said.
In London, miners were out of favour as copper prices fell, dented by the worries over eurozone debt, and by weaker demand from top consumer China.
Anglo American was the worst off, down 4.1pc, while Antofagasta shed 3.9pc after China's imports of refined copper declined more than 48pc year-on-year in April. In Dublin, Kenmare plunged 9.5pc.