European stocks fall after 4½ year high
European stocks fell yesterday as leading companies reported figures, reversing gains that pushed shares to a 4½ year high on Tuesday.
The benchmark Stoxx 600, which tracks leading shares in 18 European markets, retreated, slipping back from its highest reading since June 2008, which it reached on Tuesday.
Analysts suggested that the investors are still wary of potential pitfalls in the global economy.
“There are still some global risks out there, particularly with relation to the political situation in Europe,” Guillaume Duchesne, an equity strategist at BGL BNP Paribas SA, said. “It’s better to wait before buying equities.”
Dealers in Dublin said that a lull in corporate news meant that the day was comparatively quiet, but various factors contributed to a fall in the price of some leading stocks.
Index heavyweight CRH tumbled 4.29 per cent to close at €16.745. Dealers said that the fall was largely driven by the fact that the building materials giant went ex-dividend yesterday.
Aer Lingus, which said passenger numbers were down 1.5 per cent to 648,000 in February, slipped 0.54 per cent to €1.296.
Food group Kerry gave up some of its recent gains, sliding 1.18 per cent to €42.985.
Similarly, international packaging group, Smurfit fell 3.23 per cent to €12.
In both cases, dealers said that the fall in shares prices were down to investors “taking profit off the table” rather than anything else.
Legal General rose 3.3 pence to 166 pence, the highest price in almost six years, as the largest manager of UK pension assets raised its dividend 20 per cent to 7.65 pence a-share.
Admiral Group Plc rallied 5.3 per cent to 1,334 pence after the owner of the confused.comwebsite reported a 15 per cent increase in full-year pretax profit to £345 million sterling (€400 million).
Vodafone rallied 6.8 per cent to 180 pence, the biggest increase since February 2009, after people familiar with the situation said Verizon Communications is seeking to resolve its relationship with the UK company and has weighed options that range from ending its wireless venture with Vodafone to a full merger of the two phone companies.
Vodafone owns a 45 per cent stake in the Verizon Wireless subsidiary which is worth about $115 billion, according to analysts.
Henkel rose 2.4 per cent to €70.33 , the highest price since at least August 1992. The world’s biggest adhesives company reported a 4 per cent increase in like-for-like revenue for the fourth-quarter, topping analyst estimates for a 3.2 per cent gain.
Edenred fell 4.5 per cent to €25.60, its biggest slide in 10 months.
Danske Bank dropped 4.7 per cent to 106.10 kroner after shareholder Realdania sold a 5.2 per cent stake in Denmark’s largest lender for $955 million. The 52 million shares were priced at 105 kroner.
Axel Springer tumbled 5.9 per cent to €34.13 after the owner of Germany’s biggest tabloid newspaper forecast lower profit in 2013 because of spending to accelerate its shift to digital publications amid a declining print business.
In the US, the Dow Jones added 31.49 points, or 0.2 per cent, to 14,285.26 by 7.13pm Irish time.
Around the same time, the Standard Poor’s 500 Index gained 0.1 per cent, while oil lost as much as 1.4 per cent to trade below $90 a barrel for the second time this year.
Bank of America jumped 3 per cent to pace gains among financial shares. VeriFone Systems rose 8.8 per cent as the maker of credit-card terminals reported earnings that beat its forecasts. Staples fell 6.9 per cent after forecasting profit that was less than analysts estimated. – (Additional reporting: Bloomberg)