'Fiscal cliff' fears push ISEQ down
IRISH shares fell again yesterday, the third day out of four, as the US moved ever closer to falling over the so-called "fiscal cliff".
By the close in Dublin, the ISEQ Overall Index had lost 0.4pc, or 13.7 points, to close at 3,328.78.
Even after three negative days this week, the index is less than 0.2pc lower on the week, having opened on Monday at 3,334.93.
The index fell sharply at the opening and never recovered, instead bumping along around its eventual closing level for most of the session.
Elan fell 1.6pc to €7.79. Shareholders on Wednesday backed the pharmaceuticals firm to split itself in two.
Construction firm Grafton Group fell 1.1pc to €3.64. Company chief executive Gavin Slark told the Irish Independent his firm was in no rush to make acquisitions.
The conglomerate DCC dipped 1.2pc to €23.80, while Glanbia fell 0.7pc a day after Glanbia Co-op agreed to give up its controlling interest in the food group.
On the other side of the board, Fastnet Oil & Gas rebounded sharply from a heavy loss on Wednesday, adding 8pc to close at 27c, while drinks firm C&C added 1.3pc to close at €4.21. US regulators cleared the way for the firm to complete its takeover of the Vermont Hard Cider Company.
The fiscal cliff weighed on markets across the continent as well yesterday, as Federal Reserve chairman Ben Bernanke said the central bank's plan to buy $45bn (€32bn) a month of US government bonds will fail to offset the effects of the fiscal cliff.
The Stoxx Europe 600 Index lost 0.4pc, while national benchmark indices retreated in 11 of the 18 western European markets. The UK's FTSE 100 slid 0.3pc and Germany's DAX declined 0.4pc. France's CAC 40 decreased 0.1pc.
"What Bernanke said is true: the extension of the programme can't offset the fiscal drag," said Konstantin Giantiroglou, head of investment advisory at Neue Aargauer Bank in Switzerland. "Interest rates are already very low and any additional monetary stimulus is marginal.
"All the focus is still on the ongoing negotiation between the US government and the majority leader of the House of Representatives (John Boehner). The sentiment is still cautious."
Financials had a rough day. Deutsche Bank lost 2.7pc after saying that increased restructuring costs will cause the bank to miss profit forecasts this quarter.
UBS dropped 1.1pc after a person familiar with the matter said US and UK regulators may fine Switzerland's biggest bank more than $1bn for trying to rig global interest rates.
Volvo declined 4.3pc after Renault sold its remaining stake in the Swedish truck maker. The French carmaker disposed of a 6.5pc holding.