Equities edge lower in quiet trading

EUROPEAN EQUITIES edged lower in relatively quiet trading yesterday as upbeat sentiment on the completion of a Greek debt swap quickly ceded to concerns about borrowing levels in other parts of the euro zone, notably Spain. This sparked pressure on bank shares across Europe.

Markets were also weighed down by a report showing a slower than expected pace in exports from China, which dragged commodities lower.

DUBLIN

THE ISEQ retreated 1.75 per cent, dragged down by a 0.8 per cent decline in cement-maker CRH as well as a fall of 4.7 per cent in building materials company Kingspan, where there was a shareholder attempting to sell a block of shares.

Bakery group Aryzta, which has its primary listing in Zurich, published interim results showing a 0.9 per cent increase in revenues to €1.9 billion – a performance described by dealers as “reasonably positive”, but the stock finished down slightly yesterday, having achieved a high closing price in Switzerland on Friday.

Elsewhere in its sector there was decent volume in food group Glanbia at the €5.95 level, though the stock finished lower at €5.93.

Drinks group CC enjoyed a 2.6 per cent climb to €3.86 after an analyst at a UK broker put out a positive note on the stock.

Aer Lingus was one of the best performers of the day, advancing 3.45 per cent to 90 cent.

A report in The Irish Times that its US partner JetBlue Airways may be interesting in buying the State’s 25 per cent holding in the airline “probably didn’t do any harm” to its share price, according to one Dublin dealer.

Among the other main movers, Ryanair declined 1.25 per cent to €4.23, there was selling pressure in Dragon Oil’s stock, which fell 3 per cent to €7.33, and Bank of Ireland fell in line with weak investor sentiment towards banking stocks across Europe.

LONDON

BRITAIN’S BLUE-CHIP index ended with a small gain as profit-taking on mining companies and banks was offset by gains among defensive shares.

The FTSE 100 index ended up 0.1 per cent, with the index only moving into positive territory late in the session in what traders interpreted as a signal investors were willing to buy on any index dip.

Banks were targeted by profit takers watching technical indicators as the sector failed to close above a 23.6 per cent retracement of its February 21st to March 6th move at the end of a three day-run on Friday.

A report in the Daily Telegraph suggesting that all of the UK’s major banks could face an inquiry for allegedly mis-selling complex interest rate derivatives also weighed on the sector.

Barclays, Lloyds Banking Group and Royal Bank of Scotland fell between 2 per cent and 3.2 per cent.

Traders said some investors were rotating out of banks into real-estate groups, encouraged by improving sentiment on the commercial property market after a major acquisition involving French property developer Klepierre on Thursday.

British Land, Hammerson and Land Securities rose between 1.5 per cent and 2 per cent in high volume, extending recent gains.

Defensive stocks also outperformed, led by Morrison Supermarkets, which topped the leader board with a 2.3 per cent rise as it held an investor day to illustrate strong full-year results reported last week. Food producer Unilever and general retailer Kingfisher were also strong, up 1.9 per cent and 1.6 per cent, respectively.

EUROPE

EUROPEAN STOCKS retreated, halting a three-day rally for the Stoxx Europe 600 index, as a report showed exports in China grew at a slower pace than forecast.

Mining companies fell with metal prices. Swiss group Temenos dropped 4.9 per cent after the company terminated merger talks with Misys.

In Italy, Banca Monte dei Paschi di Siena sank 5 per cent after its biggest investor reached an agreement with banks that hold part of its stake as collateral on a loan.

The Stoxx 600 fell 0.2 per cent to 264.87 at the close. National benchmark indexes fell in 11 of the 18 western European markets.

NEW YORK

US STOCKS were little changed in early trading as investors weighed whether a Chinese slowdown will lead to an easing of its monetary policy.

Newmont Mining and Schlumberger retreated at least 2.1 per cent on concern about slower demand for commodities.

Regions Financial slumped 2.8 per cent to pace losses in bank shares as the cost of insuring against default on European sovereign bonds rose to the highest in eight weeks.

Gauges of utility and telephone shares in the SP 500, which are least-tied to economic growth, gained.

Apple, the world’s largest technology company, advanced 1.1 per cent by early afternoon.