Syria causes market jitters
European markets endured a jittery session yesterday as the Syrian conflict showed fresh signs of escalating into a wider conflict. The firing by Israel of two test missiles in the Mediterranean stoked tensions as the US considers military intervention.
Smurfit Kappa boss Gary McGann warned yesterday that an escalation of the conflict has the potential to immediately impact companies such as his, which generates 60pc of its revenue from the fast-moving consumer goods market.
Most European markets declined even as fresh economic data pointed to a surge in US economic activity and the Eurozone Purchasing Managers Index from Markit rose to 51.4 points in August from 50.3 in July. The OECD also predicted that the German and UK economies would grow at a better-than-expected rate this year.
"Markets should explode on such good economic data from the US, but there are other factors making investors more prudent," said John Plassard, vice-president at Mirabaud Securities in Geneva. "Markets are still nervous and volatile on any news coming out of Syria as we saw earlier. Investors are also weighing improving economic numbers looking ahead to any tapering talk from the Fed's next meeting."
The ISEQ Overall Index had been ahead earlier in the day, but succumbed to the pressure to end the session in the red, albeit slightly. It shed a little less than 19 points, or 0.45pc, to close at 4,229.71. Among the movers was Total Produce. It jumped 3.9pc after upping its full-year forecasts on the back of solid first-half numbers.
Shares in Bank of Ireland were unchanged at 22.4 cent. The boss of rival state-owned AIB – David Duffy – told the Oireachtas Finance Committee that a quarter of its buy-to-let loans had had no repayments made on them in the past six months.
Financial services group IFG dropped 3.3pc to €1.28, while Grafton Group gained nearly 1.6pc to €6.45.
National benchmark indices declined in 11 of the 18 western-European markets yesterday. France's CAC 40 and Germany's DAX each retreated 0.8pc. The UK's FTSE 100 lost 0.6pc, while Greece's ASE advanced 2.4pc.