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ISEQ falls as deficit fears remain

IRISH stocks fell as the markets fretted about the consequences for small and heavily indebted countries, following the weak response of European leaders to Greece’s deficit problem.

The ISEQ closed down 39.37, or 1.4pc, at 2862.71 points, led lower by industrial heavyweights, such as DCC and Smurfit Kappa. National benchmark indices advanced in 11 of the 17 western European markets that were open yesterday.

The UK’s FTSE 100 rose 0.5pc. France’s CAC 40 gained 0.3pc and Germany’s DAX increased 0.2pc. Smurfit Kappa was among the biggest fallers, sliding 5.2pc to €6.23 as investors worried about whether price increases in the sector would stick.

DCC fell 1.3pc to €18.96 after the Irish Independent had reported that the company was “very close” to raising $390m (€286m) from the US privateplacement market.

Such a move would be one of the largest private placements by an Irish corporate in recent years. Tullow Oil fell 2.6pc to €13.40, hit by rumours that the government in Uganda may impose some sort of windfall tax on the sale to Tullow of a 50pc stake in an oilfield.

IEX-listed First Derivatives slid 5.4pc to €2.65 after buying Dublin-based Cognotec for $4.7m (€3.45m). Cognotec was placed into receivership last month.

Presidents’ Day Elsewhere in Europe, the Dow Jones Stoxx 600 Index had increased 0.4pc by 5pm. Investors in Europe had to think for themselves yesterday as US exchanges closed for Presidents’ Day.

Brazil’s markets shut for the pre-Lent carnivals and China, Taiwan, Hong Kong, Singapore, South Korea and Malaysia all closed for the lunar new-year holiday.

All but six of the 19 industry groups on the Stoxx 600 advanced, extending the benchmark gauge’s first weekly gain in a month. Renault rose 2.4pc in Paris after Morgan Stanley advised buying the shares.

Air Liquide, the world’s biggest producer of industrial gases, climbed 1.3pc after earnings that beat analysts’ estimates. British Airways and Iberia rose more than 2pc after winning US approval for an expanded alliance with American Airlines.

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The euro weakened against 12 of its 16 most-traded peers as European finance ministers met in Brussels. Investors want details of a planned Greek bailout after European leaders last week pledged to support the nation but stopped short of committing public funds.

“We do not expect a clarification of how Greece is going to be rescued in an emergency,” wrote Ulrich Leuchtmann, the head of currency strategy at Commerzbank AG in Frankfurt. He added: “Uncertainty about this issue is therefore likely to continue putting pressure on the euro this week.”

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