Mixed day as election fails to calm 'fiscal cliff' fears
It was a mixed day for stock markets in Europe yesterday as continuing concerns over the US economy continued to nibble away at indices.
"Now that the election is over, people are realising that actually the election as such didn't give us any more clarification on the single biggest risk factor towards year end, which is the fiscal cliff," said Witold Bahrke, a senior strategist at PFA Pension in Copenhagen. "That is pulling markets down a bit here and then we have the issue of Greece, which is dragging on."
In Europe, the Bank of France also said that the country's economy may shrink in the fourth quarter as a survey of business confidence held near a two-year low last month.
The US economy would contract if Congress failed to act to address its so-called fiscal cliff, allowing more than $600bn (€471bn) of tax increases and spending cuts to take effect next year, Fitch Ratings said.
"We think that will tip the US back into recession," Fitch managing director Ed Parker said. "This should be a wholly avoidable, unnecessary recession."
In Ireland, the ISEQ Overall Index just managed to stay in the black to make it one of about half of the western European indices that remained in positive territory yesterday. The index closed up 0.12pc, or 3.8 points, to enter the weekend at 3,294.57.
Movers included Bank of Ireland, which shed 4.1pc to close at 9.2 cent.
Shares in mining firm Kenmare Resources fell 2.8pc to 45 cent, despite more positive news from China, which is the biggest market for its ilmenite.
Gainers yesterday included CRH, which added 1.5pc, or 21 cent, to €14.28. Consumer sentiment in the US, where CRH generates about half its business, rose this month to its highest level since 2007.
Elan rose 2.3pc to €8.48, while Petroceltic added 3.4pc to 9 cent as it was awarded a licence in Egypt.
National benchmark indices declined in nine of the 18 western-European markets. France's CAC 40 rose 0.5pc and the UK's FTSE 100 slid 0.1pc. Germany's DAX fell 0.6pc.
Credit Agricole slumped 5.9pc to €5.57. France's third-largest bank posted a quarterly loss of €2.85bn, wider than the €1.88bn average estimate of analysts.
Shares in British Airways- and Iberia-owner IAG advanced 1.5pc to 170.6p after it posted a lower third-quarter operating profit but said it would axe 4,500 jobs at Iberia.