Wednesday 22 November 2017

Stocks still reeling from Fed shock

Sarah McCabe

Sarah McCabe

THE majority of Irish stocks fell yesterday, mirroring global markets that continued to fall in response to investor concerns about a withdrawal of US fiscal stimulus and tighter conditions in China. In Europe every single market but one was down.

The ISEQ Overall Index declined by 99.82 points or 2.57pc to close at 3,784.19.

Just one of the 44 prices listed on the exchange was up on the day while 28 fell and 15 remained static. The index has fallen by just under 6pc in the last month.

Aminex, Permanent TSB and Petroneft all saw the biggest losses of the day, but all as a result of light trading.

Glanbia was down 6.8pc to €9.37, its biggest decline since June 2009, while Smurfit Kappa was down 5.2pc to €11.38.

Ryanair was down too, slipping 4.9pc to €6.85. This fall saw the airline hand back all the gains its share price has made over the past five trading days, though Cantor Fitzgerald gave the stock a long-term target price of €9 yesterday.

Bank of Ireland, like most other European banks, slid too; its share price lost 2.7pc to 14c. The only gains of the day went to Fyffes, up just 0.6pc to 71c.

Meanwhile, national benchmark indexes fell in all of the 17 western European markets trading yesterday, except Iceland.

The UK's FTSE 100 retreated 1.4pc, its lowest levels since January, as metal prices and mining companies tumbled amid concerns that a cash crunch in China will reduce demand.

CHINA

Chinese stocks plunged their most since August 2009 after the country's central bank signalled it will maintain efforts to curb speculative lending.

"What we're seeing is a shift in the policy agenda of China which will take place in the next six to nine months," said James Bevan of CCLA Investment Management in London.

"During that period, we will have continued volatility and continued uncertainty. It will be painful as the adjustment goes through."

France's CAC 40 declined 1.7pc and Germany's DAX dropped 1.2pc.

The composite Stoxx Europe 600 Index declined 1.7pc to 275.66 at the close in London. The Stoxx 600 is heading for an 8.4pc drop in June, its biggest monthly loss since August 2011.

Kabel Deutschland advanced 1.7pc to €85.50 after Vodafone, the world's second-biggest wireless carrier, raised its bid for the telecoms business to €87 a share from an initial €80.

The German company said its board plans to recommend the cash offer to its shareholders.

HSBC lost 0.9pc to £6.56, contributing to a sell-0ff by European banks as government bonds from the UK to Germany and Ireland slid.

Irish Independent

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