Global stocks slide on US stimulus fears

Iseq ends difficult trading day, losing 2.15% as index heavyweights lose ground

CRH fell by nearly 4 per cent to ¤17.85. Photograph: Brenda Fitzsimons

CRH fell by nearly 4 per cent to ¤17.85. Photograph: Brenda Fitzsimons


Fears that the Federal Reserve will scale back its stimulus as the US economy recovers hit world stock markets for a second straight day yesterday, with European equities falling the most since August. It was also a bad day on the Irish stock exchange, with the Dublin market faring worst than most of its European peers.

The Iseq index of Irish shares suffered a slump, falling 96.62 points or 2.15 per cent to 4,405.98

Index heavyweights CRH, Ryanair and Smurfit Kappa led the Dublin market lower.

Smurfit Kappa fell 5.4 per cent to €16.43. Kingspan also struggled, declining 3.6 per cent to €12.02, while CRH fell by nearly 4 per cent to €17.85. Ryanair, meanwhile, fell 2.4 per cent to €5.96.

The only stocks that performed any way reasonably were food shares, with Glanbia climbing 1.8 per cent to €11.10 and Donegal Investment Group surging 4.5 per cent to €6.51.

Fears over plans to taper America’s massive economy-boosting programme sent London’s blue-chip share index to a six week low, with miners and oil companies leading Britain’s FTSE 100 lower.

Antofagasta led the fallers, down 3.4 per cent, as UBS cut its earnings forecasts for the firm by 8 per cent for 2014 on concerns over the outlook for precious metals, citing an expected withdrawal of US quantitative easing as a factor.

High street chain Next was the biggest riser in the Footsie, climbing 2 per cent after the British Retail Consortium reported a pick-up in clothing and footwear sales towards the end of November.

UBS meanwhile upgraded bookmaker William Hill to “buy” and raised its earnings forecasts, citing the stronger economy.

Its shares climbed 1.9 per cent, getting a further boost from peer Betfair’s release of first-half results.

The FTSE 100 closed down 62.90 points, or 1 per cent, at 6,532.43 points, its sharpest one-day fall since mid-November.

European stocks fell the most in more than three months, after recent robust US jobs data raised concern that the Federal Reserve will cut its stimulus sooner rather than later.

The broad-based sell-off wiped out more than €50 billion in market capitalisation for euro zone benchmark indexes – Germany’s DAX, France’s CAC 40 , Spain’s IBEX and Italy’s FTSE MIB combined.

ThyssenKrupp slid to a 10-week low after raising €882.3 million through a share sale. The German steelmaker fell 2.2 per cent to €17.26.

Airlines came under pressure after the first human case of H7N9 bird flu in Hong Kong fanned concern that the virus is continuing to spread beyond mainland China’s borders.

Air France-KLM fell 4.2 per cent and Germany’s Lufthansa was down 3.8 per cent.

The Stoxx Europe 600 Index fell 1.5 per cent to 319.13 at the close of trading, its biggest loss since August. France’s CAC 40 dropped 2.7 per cent, its biggest drop since June, after Credit Suisse cut its rating on French stocks to underweight. Germany’s DAX slid 1.9 per cent.

US stocks fell in early trading, sending the S&P 500 index lower for three straight sessions.

Ford Motor lost 2.8 per cent, as carmaker stocks slipped amid November sales reports. Amazon slid 1.8 per cent to pace declines among retailers even as online Cyber Monday sales surged to a record.

Krispy Kreme Doughnuts plunged 19 per cent after quarterly revenue missed analysts’ estimates.

Tesla Motors’ stock jumped 14 per cent to $141.64 in high volume trading and was the biggest daily percentage gainer on the Nasdaq after Morgan Stanley named it a “top pick”. – (Additional reporting: Bloomberg, Reuters)