Business World

Thursday 19 July 2018

Motor stocks hit European bourses

Traders work on the floor of the New York Stock Exchange (NYSE) in New York. Photo: Reuters
Traders work on the floor of the New York Stock Exchange (NYSE) in New York. Photo: Reuters

Reuters

CAR stocks slammed the brakes on a relief bounce in European shares yesterday, sinking after German carmaker Daimler warned profit would be hit by higher tariffs.

Equity markets have been relatively resilient in the face of mounting trade concerns but fell broadly this week as US President Donald Trump threatened additional tariffs on $200bn worth of Chinese goods.

Daimler became one of the biggest global companies to cut its guidance on trade tensions, warning profits would be hit in part by Chinese tariffs on car imports from the United States.

Daimler shares fell as much as 4.6pc to their lowest in nearly two years.

Some investors saw trade war fears as a chance to buy stocks at slightly cheaper prices.

"We're actually looking at it as an opportunity to add some risk back into portfolios and use some of the cash that we built up," said Rory McPherson, investment director at Psigma Investment Management.

Some analysts were sceptical of Daimler's timing, saying the profit warning may be more driven by internal pressures than the external trade environment.

In Ireland, the Iseq Overall Index declined 0.55pc to 7,061.17.

Shares in hotel group Dalata rose 3.6pc to €6.90. Data this week showed a strong start for the summer hotel trade in Ireland. Ryanair advanced 1.7pc to €16.61.

The NTMA announced the cancellation of the latest €500m of bonds it has bought back from the Central Bank.

It means €11.5bn of the €25bn debt originally issued in 2013 to replace the IBRC/Anglo Irish Bank promissory note has now been cancelled, reducing future interest bills for the NTMA.

Irish Independent

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