Markets fall worldwide on euro crisis

Sat, Feb 11, 2012, 00:00

Dow Jones: 12,801.23 (-0.69%) Nasdaq: 2,547.32(-0.65%) SP 500: 1,342.64 (-0.69%)EQUITY MARKETS across the globe fell yesterday, with European stocks dropping for the fourth time in five days.

This followed a number of resignations from the Greek cabinet and public strikes in Athens, as Greece grappled with the extra spending cuts demanded by euro zone finance ministers.

The euro fell from a two-month high against the dollar as concerns about the resolution of the Greek crisis escalated while figures from the US showed that confidence among American consumers dropping more than forecast.

DUBLIN

THE ISEQ took its lead from global trends, ending the week down nearly 17 points to close at 3,101.84.

The persisting crisis about the second Greek bailout curbed sentiment, leaving investors cautious after the recent equity rally.

In terms of individual stocks, banking stocks saw some of the steepest losses. Despite figures from the Central Bank which showed that the Irish banks’ reliance on ECB funding fell by 14 per cent in January, Bank of Ireland, AIB and Irish Life and Permanent finished the day lower.

Results from Barclays, which showed that net income for 2011 fell 16 per cent to £3 billion weighed on the financial sector generally, while Greek banks and other European lenders saw their share price fall.

Kenmare Resources was one of the best performers gaining 4 per cent to €0.636, while Kerry Group added a half a per cent ahead of results later this month and on the back of strong quarter four results from peer company International Flavors Fragrances (IFF).

Smurfit Kappa, which was upgraded by Credit Suisse after its results earlier this week, was the subject of investor interest, although it ended the session off 1.5 per cent at €7.16.

LONDON

UK STOCKS declined for the fourth time in five days, with the FTSE 100 index extending its first weekly drop in a month, after euro zone finance ministers withheld a rescue package for Greece. The UK’s FTSE 100 Index slipped 0.7 per cent, for a 0.8 per cent drop in the week.

Cable and Wireless sank 17 per cent after cutting a forecast for its Panama unit. National Grid retreated after JPMorgan Chase downgraded its recommendation on the utility.

Anglo American led commodity producers lower as metals prices declined. The broader FTSE All-Share Index also retreated 0.7 per cent.

“Trading all week had been dominated by the lack of a Greek deal,” Chris Beauchamp, a market analyst at IG Index in London, wrote in a note.

Barclays shares rose despite a profits fall. The bank reported a 3 per cent drop in pretax profits and admitted it is unlikely to meet its return on equity target of 13 per cent by 2013 – the ratio is currently at 6.6 per cent.

However, its shares rose after chief executive Bob Diamond announced a 9 per cent rise in the final dividend and progress on reducing bad debts.

EUROPE

EUROPEAN STOCKS fell for the fourth time in five days. National benchmark indexes declined in 16 of the 18 western-European markets. France’s CAC 40 dropped 1.5 per cent, while Germany’s DAX lost 1.4 per cent.

National Bank of Greece, the country’s largest lender, fell 9.5 per cent to €2.68. Alpha Bank, the second-biggest, plummeted 9.4 per cent to €1.45.

Saab declined 8.6 per cent to 136.40 kroner, its biggest drop since August. The Swedish company reported a fourth-quarter net income of 413 million kroner ($62 million) against analysts’ projection for 474 million kroner.

Commerzbank, Germany’s second-biggest lender, lost 5.2 per cent to €2.06.

Alcatel-Lucent, France’s largest telecommunications-gear supplier, jumped 12 per cent to €1.68 after it said it expected to increase adjusted operating margins in 2012.

US

US STOCKS fell, snapping a five- week-rally for the SP 500, on concern that plans to help Greece avoid default were unravelling and as confidence among American consumers dropped more than forecast.

Citigroup and Bank of America retreated more than 1.3 per cent to pace declines among financial companies.

Commodity producers slumped as Freeport-McMoRan Copper and Gold, Alcoa and Halliburton decreased at least 1.9 per cent. First Solar, the biggest maker of thin-film solar panels, tumbled 10 per cent after permitting issues delayed a US loan guarantee for a power plant in California.

Apollo Global Management dropped 6.1 per cent. The private equity firm that went public last year said fourth-quarter profit fell 66 per cent as market swings hurt its private equity holdings. NYSE Euronext gained 4.5 per cent.

LinkedIn surged 18 per cent as the biggest professional-networking website reported quarterly sales that more than doubled and forecast higher 2012 revenue. – (Additional reporting: Reuters/ Bloomberg)