Business World

Friday 19 July 2019

Five-year high triggers sell-off

John Mulligan

John Mulligan

It was a day for taking stock and taking profits yesterday as European investors sold shares after they hit a five-year high this week.

Bourses declined as the US Federal Open Market Committee began a two-day meeting where it's expected to decide to reduce its $85bn (€64bn) of monthly bond purchases by $10bn.

European stocks had hit their highest levels yesterday since Lehman Brothers collapsed five years ago after Lawrence Summers withdrew from the race to replace Federal Reserve chairman Ben Bernanke.

Dirk Thiels, who helps to oversee €65bn in assets as head of investment management in KBC Asset Management in Brussels, said that he wasn't surprised to see indices yield ground yesterday.

"Investors see it as a good time to sell," he said.

"People are also more uncertain regarding what the Fed might say this week," he added. "We want to see how the Fed reads the economy now."

In Germany – the EU's biggest economy – data released yesterday showed investor confidence had reached its highest level in September since April 2010.

In Ireland, the ISEQ Overall Index closed just barely in negative territory, having been ahead earlier. But it shed just less than a point to finish at 4,276.49.

Resources firms were among the main decliners. Ilmenite miner Kenmare Resources shed 3.6pc to fall to 32 cent, while Providence Resources declined 3.8pc to €3.80. Petroceltic, which owns assets in countries such as Egypt and Algeria, fell 3.8pc to €1.75.

Bank of Ireland fell 1.8pc to 21.3 cent, while insulation maker Kingspan was 1.1pc lower at €11.57.

There was some better news for firms, including Irish Ferries owner Irish Continental. It rose 3.2pc to €25.50. Other financial services firms rose, including IFG, which advanced 2.3pc to €1.33. Insurer FBD rose 3.4pc to €14.98.

National benchmark indices dropped in 14 of the 18 western-European markets yesterday. Germany's DAX and France's CAC 40 each fell 0.2pc. The UK's FTSE 100 declined 0.8pc.

Irish Independent

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