Stocks down on unresolved debt crisis
STOCK MARKETS and the euro fell yesterday as investors looked past recently announced stimulus plans, focusing instead on weak economic data and the euro zone’s unresolved debt crisis.
Stocks dropped across Europe and the Dublin market was no exception, with leading shares shedding value.
THE ISEQ index closed down, on par with its European peers, which also slid. It fell 15 points or 0.4 per cent to finish at at 3,329.
Packaging company Smurfit Kappa was one of the big winners of the day, ending up 4.1 per cent at €8.12. The international paper and packaging maker yesterday announced plans to buy Orange County Container Group for $340 million (€260 million).
Independent News & Media also gained, rising 11.9 per cent to close at €0.15.
Index heavyweights Paddy Power and CRH were not so lucky, falling 2.1 per cent and 1.37 per cent respectively to finish at €58.35 and €15.43.
Low fares airline Ryanair also declined, finishing down 1.01 per cent at €4.41.
UK STOCKS declined for a third day as EU leaders disagreed on the timing of a banking union to help resolve the region’s sovereign-debt crisis and German business confidence unexpectedly fell.
Anglo American paced losses among miners after Bank of America and Citigroup downgraded the shares.
Bumi slumped the most since it sold shares to the public in July 2010 as the company founded by Nathaniel Rothschild commissioned a probe into charges of financial irregularities at its Indonesian subsidiary.
Qinetiq, the company spun off from the UK’s Ministry of Defence in 2006, jumped 6.5 per cent after saying first-half earnings were stronger than originally expected.
Petra Diamonds surged 7.6 per cent to 118 pence, the most since May 10th. The producer of the gems in South Africa posted full-year earnings before interest, taxes, depreciation and amortization that matched analysts’ estimate. The company said its mid- to long-term earnings outlook remains positive.
The FTSE 100 Index fell 13.78 points, or 0.2 per cent, to 5,838.84 at the close in London.
EUROPEAN SHARES fell yesterday as Germany and France disagreed on when to introduce a banking union for the euro area and a report added to concern about the strength of China’s economy.
German chancellor Angela Merkel rejected French president François Hollande’s appeal to activate oversight of the banking union “the earlier, the better”.
The deadlock over regulation may delay into next year a key building block in resolving the single currency’s debt crisis.
German business sentiment dropped for a fifth straight month in September to its lowest since early 2010, raising fears of recession in Europe’s biggest economy.
Spain is facing increasing pressure to apply for a bailout, while a report in Germany that Greece may have a €20 billion hole in its state budget also unnerved investors.
“We have been surprised by the rebound and by the extent of the rebound. Now we are back to the reality. None of the problems have really been solved despite Draghi’s intervention,” said Cyrille Urfer, head of asset allocation at Swiss bank Gonet.
The euro zone Euro STOXX 50 index fell 0.7 per cent to 2,557.89. France’s CAC 40 dropped 1 per cent, while Germany’s DAX slipped 0.5 per cent.
US STOCKS fell modestly after disappointing German data added to evidence about the weak prospects for the global economy’s growth.
Concerns about a stalling global economy were reflected in energy-related shares as the PHLX oil service sector index shed 1.4 per cent to go with a 1.7 per cent drop in US crude oil. Global demand worries sent crude prices down more than 6 per cent last week.
The Nasdaq was pulled lower by Apple, which shed 1.4 per cent to $690.16 even as the company sold out of its latest Smartphones as concerns arose that the iPhone maker was unable to produce the new phone fast enough to meet demand. Homebuilder Lennar reported steep increases in its third-quarter earnings and revenue, while orders rose 44 per cent. Despite the solid results, Lennar’s stock slid 1.8 per cent to $36.85.
Peregrine Pharmaceuticals plunged 77.2 per cent to $1.23 as the Nasdaq’s most actively traded stock after the company said it found major discrepancies in results from a mid-stage study of its experimental lung cancer drug conducted by a third-party contractor. Google rose to a record high amid optimism about its growth prospects from online advertising revenue. The shares increased 1.8 per cent to $747.30 at 12.26pm New York time, after reaching $747.47, the highest intraday price since its initial public offering in August 2004. (Additional reporting: Bloomberg, Reuters)