European shares fall on investor concerns

Wall Street sagged yesterday, pulling back further from recent records as investors found few reasons to buy, but the euro was supported by data that showed a surge in factory output in Britain and Germany.

European shares cut gains to trade lower, hit by declines in financial heavyweights, and some traders predicted more weakness as investors looked to book profits on last month’s rally.

DUBLIN
The market performed on a par with its peers yesterday, ending the day a little weaker at 4,204.79.

CRH finished up at €16.66 and was among the most traded stocks along with Smurfit Kappa, Ryanair, Kerry Group and Bank of Ireland.

“The stock is behaving well ahead of results on August 20th. It has also performed strongly in relation to its peer Heidelberg Cement,” one analyst said.

There was very good volume in Smurfit Kappa, with more than two million shares traded in Dublin. The stock ended the day down half a per cent at €15.09.

Bank of Ireland climbed half a per cent to 18 cent following half-year results which highlighted a significant improvement in net interest margin.

CPL Resources was among the main gainers, surging nearly 5 per cent to close at €6.08.

LONDON
The FTSE 100 index slipped back despite upbeat UK economic data as investors worried about the slowdown in emerging markets.

Insurer Legal & General was among the biggest top tier gainers, rising 2.3 per cent, after reporting surging half-year profits, which included a larger-than-expected dividend rise.

But miners weighed heavily on the FTSE 100 on worries over Australia’s waning commodities market, as well as falling first-half pre-tax profits at silver miner Fresnillo.

The group, which slumped nearly 11 per cent, cut its dividend as it was hurt by the sharp fall in precious metals prices.

Outside the top flight, baker Greggs suffered on the FTSE 250 Index after the recent summer heat wave left it nursing a £2 million hit to profits.

The Newcastle-based company, which has nearly 1,700 shops, saw a like-for-like sales slump 3.2 per cent in the five weeks to August 3rd and is to slow shop expansion plans. Its shares were down nearly 9 per cent after the profits warning.

EUROPE
European stocks declined as comments from Federal Reserve policy makers fuelled speculation the central bank will begin tapering stimulus next month, and as companies from Salzgitter to Lanxess cut profit forecasts.

Salzgitter, Germany's second-largest steelmaker, tumbled 12 per cent to €25.27 after saying it expects a pretax loss of about €400 million this year.

Lanxess lost 4.3 per cent after saying it sees no increase in demand in the second half.

Munich Re, the world's biggest reinsurer, dropped 4.9 per cent to €145.25 after it said second-quarter profit fell 35 per cent, missing analysts' estimates, as claims arising from natural disasters rose.

The euro zone’s blue-chip Euro Stoxx 50 index fell 0.7 per cent to 2,790.78 points. Germany’s DAX fell 1.2 per cent and France’s CAC 40 slipped 0.4 per cent.

US
Stocks fell in early trading, sending the Standard and Poor's 500 Index lower for a second day, as results from retailers disappointed and trade data fuelled concern that the Federal Reserve may reduce its bond purchases this year.

American Eagle Outfitters and CVS slumped more than 2.1 per cent.

International Business Machines retreated 2.2 per cent after requiring most US employees in its hardware division to take a week off amid slowing demand.

Credit Suisse cut its rating on the IBM stock to "underperform" from "neutral", saying organic growth would be challenging in the future.
– (Additional reporting: Bloomberg, Reuters)