Lowest close for ISEQ in fortnight amid Fed concerns
EUROPEAN and Irish stocks declined for a second week, trimming their biggest monthly rally since January, amid concern that positive news from the United States will encourage the Federal Reserve to taper its debt-buying programme.
The ISEQ closed down 28.39 points, or 0.7pc, at 4012.9 points, which was the lowest close in a fortnight.
Independent News & Media, Fyffes, CRH and Glanbia were among the biggest fallers as they pared recent gains. Heavyweight CRH closed down 2.2pc at €16.30 while Glanbia ended the session down 1.3pc at €10.60.
Among the gainers were mining company Ormonde, up 14.1pc at 6 cents, and ICG which closed up 4.6pc at €22.92 following the ferry operator's bullish AGM earlier in the week. FBD was also a winner, ending the session 2.2pc higher at €13.80.
Aer Lingus had a good day too, gaining 4.3pc to €1.62. Yesterday morning it released a statement on recent Labour Court recommendations regarding its pensions deficit, providing a framework for the final resolution of the issue. Dublin stockbrokers Goodbody calls it "a positive outcome to a very tricky situation".
In Europe the composite Stoxx 600 Index lost 0.8pc to 300.88 this week, led by a selloff in real estate, food and healthcare companies.
The gauge has still advanced 1.4pc this month, climbing in May to its highest level since June 2008. The Stoxx 600 has advanced for 12 consecutive months, its longest winning streak since 1997.
"We are aware that a growing number of investors are concerned the Fed may start to taper-off its stimulus measures, but we continue to like equity markets because quantitative easing is likely to remain accommodative, at least throughout 2013," said James Butterfill, global strategist at Coutts.
Fourteen of the 18 western European benchmarks declined over the past week. The DAX slid 0.6pc to 8,348.84 at close of business in Frankfurt though the gauge still climbed 5.5pc in May. France's CAC 40 Index lost 1.2pc to close at 3,948.59. In London the FTSE 100 fell by 1.1pc.
H&M dropped 2.7pc as Goldman Sachs lowered its rating for the company to sell, saying profitability at Europe's second-largest clothing retailer will suffer as customers shift to online shopping.
In Germany, chocolate maker Linde dropped 0.7pc to €148.05, declining for a third day.