Shares fall as Italy makes pledge on euro
European shares reversed earlier gains yesterday to post a decline as concerns, including the new Italian government, continued to cloud the equity outlook.
The ISEQ index of Irish shares lost 0.29pc, led lower by Smurfit Kappa, which lost almost 7pc as suitor International Paper looked set to walk away from takeover attempts.
The Stoxx 600 index of European shares erased its advance as US stocks also lost momentum, with the S&P 500 trading lower.
Italian bonds declined for the first time since they blew up a week ago as new prime minister Giuseppe Conte pledged in his maiden speech to pursue a programme of fiscal expansion. The euro gained after he later said that an exit from the shared currency is not under discussion and has never been a target for his government.
"Today, we're taking a pause," said Chris Zaccarelli, chief investment officer of Independent Advisor Alliance. "The market is reassessing what's going to happen from here. [There are] continued concerns over what will happen with trade, and I think that's the biggest overhang to the stock market right now."
The outlook for global equities had taken an upward turn in recent sessions, not least because stronger-than-expected data from the US showed the world's largest economy is in rude health.
It's a relief to investors after weeks of turmoil, though with US President Donald Trump stepping up his aggressive trade policies, reasons for caution remain.
Ernie Cecwilia, chief investment officer at Bryn Mawr Trust Company, said: "You have good fundamental data, whether it be on the macro side or the micro side...then you have underlying fiscal policy as stimulative and monetary policy more restrictive than it has been."