Tuesday 22 October 2019

Shares fall on US stimulus decision

Thomas Molloy

Irish and European stocks dropped after the Federal Reserve signalled it will scale back its stimulus if the US economy improves and as data showed Chinese manufacturing shrank.

As reported elsewhere in these pages, the ISEQ Overall Index closed down 27.95 points, or 0.7pc, at 4,040.77 points as European stocks endured their worst session in 10 months.

National benchmark indexes declined in all 18 western-European markets. The UK's FTSE 100 lost 2.1pc, its biggest drop in a year. France's CAC 40 and Germany's DAX also decreased 2.1pc each.

In Dublin, the worst performers were Independent News & Media, Fyffes and Bank of Ireland. INM slid 7.9pc to close at 4 cent while Fyffes ended the day down 4.4pc at 66 cent.

Sister company Total Produce slipped 3pc to 65 cent while Bank of Ireland closed down 3.1pc at 65 cent.

Companies such as Aminex and Ormonde Mining gained as they pared recent losses. Elan jumped 2.5pc to €9.47 as the board rejected Royalty Pharma's takeover bid.

All 19 industry groups in the Stoxx 600 fell, with gauges of automotive and mining companies posting the worst performances. PSA Peugeot Citroen and Anglo American led carmakers and mining companies lower respectively, on concern demand from China will weaken.

DATA

Trade was brisk all over the world. The number of shares changing hands in Stoxx 600 companies was 24pc greater than the average of the past 30 days, according to data compiled by Bloomberg.

Man Group, the world's biggest publicly traded hedge fund manager, slumped 6.4pc, its largest drop since October. Berenberg Bank started coverage of the stock with a sell recommendation.

The brokerage said that Man's sales would probably remain slow and its margins would come under pressure as its seeks funds from institutional investors.

ARM Holdings, whose chip designs power Apple's iPhone and iPad, plunged 5.2pc. Exane BNP Paribas downgraded the shares to neutral from outperform, saying that Intel's new platform may enable it to outperform ARM's designs.

SABMiller lost 2.1pc. The world's second-largest brewer said earnings before interest, taxes and amortisation in the year to March 31 rose to $6.42bn. That missed the median estimate of 13 analysts in a Bloomberg News survey that called for $6.46bn.

SBM Offshore rose 3.6pc, for the biggest gain on the Stoxx 600. The world's largest supplier of floating oil rigs reported a 35pc increase in first- quarter revenue to $1bn.

The order portfolio increased 49pc to a record $21bn, the company said.

Irish Independent

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