Monday 26 February 2018

Shares slip to 11-week low on ECB plans

A currency exchange trader counts money at his office in Islamabad. Photo: Reuters
A currency exchange trader counts money at his office in Islamabad. Photo: Reuters
Donal O'Donovan

Donal O'Donovan

European shares fell yesterday to their lowest in 11 weeks after minutes from the ECB'S latest meeting showed the central bank had left the door open to scrapping its bond-buying pledge.

The pan-European STOXX 600 ended the session 0.7pc lower, recovering some of its losses with all but three sectors closing in negative territory. Eurozone blue chips also hit an 11-week low, while Britain's FTSE 100 fell 0.4pc. The Iseq index fell more than 1pc to 6,851.04. Shares in AIB fell more than 3pc to €4.96 each.

Associated British Foods rose 2.6pc, among top gainers in Europe, after the company said its full-year outlook had marginally improved after a better-than-expected performance from its Primark clothing chain.

"The key divisional figure in this statement, as has become the norm with ABF, is Primark sales growth," Morgan Stanley said.

Banks were a bright spot, having been recently underpinned by talk of tightening monetary policy conditions. They were the top-gaining sector, up 0.7pc.

Italian lenders were the top performers, up 1.8pc following a series of deals in the last two weeks that have restored confidence in the sector's prospects.

Italy's economy minister, Pier Carlo Padoan, said there were no more "brushfires" threatening other banks after the government wound down two Veneto-based lenders last month in a deal that could cost the state up to €17bn.

Commerzbank also gained 3.3pc after a Bloomberg report said that buy-out firm Cerberus was considering buying a minority stake in the German lender through purchases on the market.

Stocks sensitive to a rise in interest rates, such as utilities, continued to weigh, with the sector down 0.8pc.

Additional reporting by Reuters

Irish Independent

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