Saturday 21 April 2018

Stocks hit by fears for eurozone economy

Traders work on the floor of the New York Stock Exchange
Traders work on the floor of the New York Stock Exchange
Sarah McCabe

Sarah McCabe

EUROPEAN stocks slid yesterday, posting their longest losing streak in five months, as European Central Bank president Mario Draghi said that financial-market developments and low domestic demand may hurt the euro-area's economy.

"Markets are trying to find their orientation," said Matthias Jasper, head of equities at WGZ Bank in Dusseldorf. "The focus is still on Fed tapering concerns, and Draghi hasn't said anything to surprise markets in a positive way. Ahead of the next Fed meeting, markets will remain a bit nervous."

The Stoxx Europe 600 Index was down 0.9pc to 314.41 at the close of trading in London. The equity benchmark has still gained 12pc this year as central banks around the world pledged to keep interest rates low for a prolonged period of time.

Irish stocks fell, with the ISEQ Overall Index down 0.59pc, or 26 points, to 4,349.52 by the close of business.

Dropped

Mining companies saw some of the biggest percentage losses of the day. Petroneft Resources shed 7pc to 6c while Fastnet dropped 6pc to 17c and Providence Resources shed 3pc to close at €3.00. The Irish drilling company said yesterday it has secured a license option for an undrilled bloc off the south coast of Ireland.

Aer Lingus dropped 2pc to €1.31 after it announced it expects no improvement in its short-haul operations during the rest of the year.

INM led the gainers, up 5c to 13c, followed up by property investment fund Green REIT, which rose 2pc to €1.22. Permanent TSB added 2pc to 5c.

In the UK, stocks fell for the fifth day, their longest losing streak since April, as the Bank of England and the European Central Bank left their stimulus policies unchanged. The FTSE 100 lost 11.64 points, or 0.2pc, to 6,498.33.

On the other side of the Atlantic, investors awaited publication by the US Labour Department of last month's reading on non-farm payrolls. Data may show the unemployment rate fell to 7.2pc.

The Fed has said it will consider reducing its $85bn (€62bn) of monthly bond purchases if the economy improves in line with its forecasts.

Irish Independent

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