Stocks fall worldwide as US government shutdown looms
European stock under additional pressure because growing political crisis in Italy threatens the government there
Shareholders in biotech company Elan got an update on their opportunity to vote on Michigan-based pharmaceuticals group Perrigo’s proposed acquisition of the Irish company on November 18th in Dublin. Photographer: John Cogill/Bloomberg News
Investors worries that even a temporary US government shutdown could put a damper on an already weak economic recovery hung over global markets yesterday.
Stocks fell worldwide as political disagreements in Washington made a shutdown increasingly likely. European stocks were under additional pressure because a growing political crisis in Italy is threatening the government there.
The Iseq index slipped 0.06 per cent to 4,238.28 as the worries about the Republican Party threats to create chaos in the public payments system there, hit markets globally.
Shareholders in biotech company Elan got an update on their opportunity to vote on Michigan-based pharmaceuticals group Perrigo’s proposed acquisition of the Irish company on November 18th in Dublin. The deal, which was announced last July, will see the US generic drugmaker pay $8.6 billion (€6.48 billion) for Elan in a deal that will hand it royalty rights from a blockbuster treatment and tax savings from being domiciled in Ireland. Elan shares closed yesterday at €11.50, a rise of 0.04 per cent.
Swiss-based food group Aryzta marked the fifth anniversary of its creation with a strong set of results for 2013. The group’s share price closed at €49.50, up 4.10 per cent.
Building materials group CRH closed down 0.56 per cent, at €17.65, while Ryanair lost 0.77 per cent, to close at €6.29 per cent. Bank of Ireland lost 2.33 per cent, to close at €0.21.
UK stocks fell to their lowest level in a month, paring a quarterly gain, as Italy‘s government faced collapse and the US neared a partial shutdown.
A measure of London-listed mining stocks slipped to a four- week low as a report showed manufacturing in China expanded at a slower pace than economists had predicted.
Salamander Energy slumped 9.6 per cent to 117.5 pence after saying it abandoned an exploratory well in the Gulf of Thailand.
Persimmon gained 2.4 per cent 1,080 pence as JPMorgan Chase upgraded its rating on the housebuilder. Barratt Developments climbed 2.2 per cent to 308.6 pence, while Bellway rose 4.2 per cent to 1,315 pence as a report from Hometrack, a property researcher, showed average house prices jumped in September.
The FTSE 100 Index lost 50.44 points, or 0.8 per cent, to 6,462.22 at the close of trading in London. The equity benchmark still gained 0.8 per cent this month as the Federal Reserve refrained from reducing its monthly asset purchases.
European stocks declined the most in a month, trimming the best quarter in four years.
UniCredit and Intesa Sanpaolo, Italy’s biggest banks, dropped more than 1 per cent as the nation‘s benchmark FTSE MIB Index slid 1.2 per cent. The Stoxx Europe 600 Index fell 0.6 per cent to 310.46 at the close of trading, the biggest drop since August 30th.
Germany‘s DAX each lost 0.8 per cent, while France‘s CAC 40 Index slid 1 per cent.
Stora Enso, which had climbed 17 per cent from May 31st through last week’s close, tumbled 5.4 per cent to €6.27 as UBS lowered its recommendation on Europe’s biggest paper maker to sell from neutral. Telecom Italia rose 5.2 per cent to 61 cents amid speculation that chief executive Franco Bernabe will resign.
US stocks slid, paring a quarterly gain for the S&P’s 500 Index, as a stalemate over the federal budget increased the likelihood of a government shutdown. All 10 main industries in the S&P 500 dropped.
Overall, the index fell 0.5 per cent to 1,684.10 at 1:09 p.m. in New York, after declining as much as 1 per cent earlier in the day. The Dow Jones Industrial Average lost 99.79 points to 15,158.45. Procter & Gamble slipped 1.5 per cent to $76.06 and Coca- Cola retreated 1.3 per cent to $37.90 as consumer-staples companies lost 0.8 per cent.