Markets worldwide fall on euro fears

GLOBAL STOCKS fell again as euro zone leaders prepared to meet in Brussels amid growing fears that Greece may leave the currency bloc. The euro fell to a 21- month low against the US dollar.

Fears about Europe’s growing debt crisis has wiped almost $4 trillion (€3.2 trillion) from equity markets worldwide this month.

The Iseq fell 1.7 per cent, although the decline lagged falls across Europe where concerns about the precarious Greek financial situation spooked investors.

DUBLIN

BANK OF Ireland posted the biggest decline of the main stocks on the Iseq, falling 6.9 per cent, as the sell-off in European financial shares dragged down Ireland’s surviving bank stock on Dublin’s main market.

Bank of Ireland closed down half a cent to just over eight cents a share in strong trading in the stock. The closing price is two cents below the price at which the bank attracted a group of North American private investors last summer, saving the lender from Government control.

One trader reported the market to be weak all day despite a rally in bond yields early in the morning.

The yield on the Government’s 2020 bond, regarded as the benchmark, fell to 7.35 per cent, down from 7.39 per cent.

Independent News and Media closed down 5.8 per cent, or almost two cents, to 26 cent a share.

Packaging giant Smurfit Kappa suffered from concerns about its ability to raise prices and general fears that an economic slowdown would mean fewer orders for cardboard boxes. Speculation surrounded the shares as Morgan Stanley purchased a chunk of stock in the company and then sold off some. The company closed down 4.9 per cent at €5.45 a share.

The day was not much better for industrial group DCC, which ended the day 4.6 per cent lower at €18.80 a share.

Ryanair fell further, dropping below the €4 mark on the airline’s poorer outlook. It closed down 2.5 per cent, or 10 cents, at €3.90.

International building materials group CRH, the market’s largest stock representing about a third of the index, performed better than most on the day, falling 1.5 per cent, or 21 cents, to €14.14 a share.

Financial group IFG climbed 2.3 per cent to €1.35, food company Glanbia rose 0.5 per cent to €5.88, while building materials and DIY company Grafton gained by a similar amount to €3.11.

LONDON

UK STOCKS tumbled the most in six months, led by a sell-off in banks and mining companies.

Barclays and Vedanta Resources both fell more than 4.5 per cent. London Stock Exchange Group retreated the most in 2½ years after UniCredit and Intesa Sanpaolo sold a combined 11.5 per cent stake.

Burberry fell after the luxury retailer forecast a reduction in profitability.

The FTSE 100 Index lost 2.5 per cent, erasing the previous session’s 1.9 per cent rally.

The market gauge has sunk 12 per cent from its high this year on concern that Greece will fail to elect a government that is willing to implement austerity measures required to stay in the euro.

EUROPE

EUROPEAN STOCKS slid the most in a month. The Stoxx Europe 600 Index slid 2.1 per cent at the close after surging 2.5 per cent over the previous two days, the biggest drop since April 23rd.

The gauge has fallen 12 per cent from this year’s high on March 16th amid mounting speculation that Greece will be unable to form a government which would be willing to implement pledged austerity measures.

Germany’s DAX fell 2.3 per cent, France’s CAC-40 fell 2.6 per cent and the Spanish Ibex slid by 3.3 per cent.

“There was no reason for the market to have gone up on Monday and Tuesday,” said JN Financial senior trader Adrian Redmond. “Contagion worries are creeping across the board again and people will be selling the market down unless authorities do something to end the uncertainty.”

US

STOCKS STAGED a late-day reversal yesterday, rallying into the close as a sharp rise in materials shares boosted the SP 500 and gains in Apple helped lift the Nasdaq.

Towards the close traders cited rumours that the EU was considering a proposal to guarantee bank deposits across the union. Such a move could assuage fears of bank runs in Spain and Greece. The rumours, which one trader said may have originated in London, appeared to be unfounded.

The SP’s materials sector gained 1.1 per cent. Alpha Natural Resources gained 5 per cent. Boosting the Nasdaq were shares of Apple, up 2.4 per cent.

Dell plunged 17.2 per cent, its biggest one-day drop in more than a decade.

Hewlett-Packard lost 3.2 per cent.

Falling oil prices also depressed the energy sector, with an SP index of energy companies edging up 0.4 per cent into the close. – Additional reporting: Bloomberg/ Reuters