Chinese weakness spooks markets

The latest signs of weakness from the Chinese economy spooked investors during a dismal start to the week for European markets.

Mining stocks came under most pressure after a slump in export growth in the world’s second-largest economy was accompanied by a surprise contraction in imports, fuelling concerns about the strength of demand. US stocks fluctuated as biotechnology shares advanced to offset continued selling in energy producers after crude sank to a five-year low.

DUBLIN

The Iseq index of leading shares finished down 0.59 per cent, or 31.51 points, at 5,293.64.

UTV

, due to launch a television station in the Republic next year, finished down 1.7 per cent at €2.31. The

Sunday Times

recently reported it had been forced to reduce its advertising rates because of competition with rival

TV3

.

Independent News & Media, whose largest shareholder is private radio station owner Denis O'Brien, finished down 2.2 per cent at 13 cents. It was reported yesterday that new government guidelines on media mergers made it "undesirable" for one person or business to hold excessive media influence and suggests a "public value" test for future consolidation in the industry.

Hotel group Dalata finished unchanged at €2.89 despite recently acquiring Pillo Hotel for €10.5 million, taking its total spend on new hotels to €75 million since its flotation. Davy stockbroker said the group was now "comfortably Ireland's biggest hotel operator with a broad national presence".

LONDON

With the price of Brent crude oil now well below $70 a barrel, the commodity weakness pushed the FTSE 100 Index 70.7 points lower, a drop of 1 per cent. Big fallers included

BHP Billiton

with a decline of 37p to 1437p, while oil and gas services firm

Weir

was 97p cheaper at 1741p at the top of the fallers board.

BP was down 2 per cent to 417.3p as jitters over the oil price were compounded by its defeat in a US Supreme Court battle over Gulf oil spill compensation claims, many of which it said had no connection to the disaster.

Marks & Spencer lost 3 per cent amid signs that the retailer's recently overhauled online service has been struggling to cope with Christmas demand.

The stock fell 13.4p to 483.5p as the problems have blunted hopes of a revival in M&S’s fortunes, a month after signs of improved trading in womenswear and a surprise rise in half-year profits cheered the City.

In contrast, Next gained 10p to 6665p but Associated British Foods was 58p lower at 3226p after its warning that Primark's like-for-like sales had been below expectations, following the warm autumn.

Other big fallers in the top flight included Hargreaves Lansdown, after its announcement that finance director Tracey Taylor had decided to leave the fund supermarket business. Shares fell 3 per cent or 28.5p to 962.5p.

EUROPE

In Europe,

BP

slipped 1.8 per cent after the

Sunday Times

reported the company would cut jobs and freeze projects, following an interview with chief financial officer

Brian Galvary

.

Royal Dutch Shell

and

Total

also declined. Construction companies fell the most among 19 industry groups in the Stoxx 600.

Sika

tumbled 20 per cent and

Cie. de Saint-Gobain

lost 6.2 per cent.

NEW YORK

Celgene and Gilead Sciences

advanced at least 2.6 per cent to push the Nasdaq 100 Index up 0.2 per cent by mid-afternoon.

Cubist Pharmaceuticals

rose 35 per cent as

Merck

agreed to acquire the maker of antibiotics. Utilities rallied 1.1 per cent as a group.

McDonald's lost 3.5 per cent, the most in two years, after same-store sales trailed analysts' estimates. Chevron sank 3.5 per cent to pace losses among energy shares as West Texas Intermediate for January delivery, the US benchmark, declined 3.9 per cent in New York. – (Additional reporting: Bloomberg/Reuters)