Syrian crisis depresses global markets
Slow trading session on Iseq as Ryanair slips almost 3% on Middle East fears
Ryanair lost ground on investor concerns over price of aviation fuel. Photograph: Alan Betson
The Iseq slid yesterday in line with other European exchanges as stocks across the continent suffered their biggest daily drop in two months. Oil prices rose nearly 3 per cent on the possibility western involvement in Syria could spark a wider conflict and destabilise the Middle East.
The threat of a military strike against the Assad regime prompted investors to take profit on some of this summer’s best performers and to buy insurance against future losses. Investors ditched many blue-chip multinational stocks in favour of assets less exposed to global economic conditions, such as German and US government bonds.
Germany’s DAX lost 2.3 per cent yesterday, France’s CAC 40 dropped by 2.4 per cent and the FTSE 100 in Britain slid 0.8 per cent.
Traders said volumes were weak across the board . Ryanair fell by almost 3 per cent as investors took fright over what effect the situation in Syria might have on the price of aviation fuel. Its share price closed the at €6.52, after a late surge of sellers in the market.
FBD was among a small band of stocks that saw decent levels of trading in Dublin, although it didn’t help its share price. The company reported pre-tax profits of €19.1m for the six months to the end of June, down from €21.8m the same time last year. The stock suffered badly, dropping by almost 5.5 per cent to €15.50.
Smurfit Kappa Group, the paper and packaging giant, fell by close to 4 per cent. Traders said it was because economic data from China showed lower than expected levels of cardboard and paper imports, suggesting problems ahead for the consumer market.
Carmakers were among those hardest hit on European markets, on fears of higher oil prices and the effect this might have on sales. Renault and Porsche fell 4.7 per cent to €56.40 and 4.1 per cent to €64.70, respectively.
Shares of Volkswagen, Europe’s largest carmaker, slid 3.2 per cent to €176.35. Daimler AG, the third-biggest maker of luxury vehicles, slipped 4.8 per cent to €52.89.
Fears of more instability in Italy hit the country’s banks. UniCredit and Intesa Sanpaolo, its two largest lenders, dropped 4.2 per cent to €4.23 and 4.4 percent to €1.45, respectively.
Royal Bank of Scotland, the owner of Ulster Bank, was among the worst hit in London. It fell 4.1 per cent, weighed down by a newspaper report that members of parliament were increasing pressure to have the bank broken up.
In a rare bright spot, bullish broker comments helped the share price of some of the United Kingdom’s and Ireland’s best-known retailers. Marks & Spencer rose 1.6 per cent to £4.79 after Citigroup raised its recommendation on the company to “buy” from “neutral”. Next gained 1.5 per cent to £4.99 after Bank of America said it offers competitive pricing in clothing. The brokerage raised its recommendation to buy from neutral.
Goldman shares fell 2.2 per cent to $154.47, as the fallout from its trading glitch continued. It lost tens of millions of dollars after a computer error led to a flood of erroneous options trades last week.
Retailer JC Penney climbed 3.4 per cent to $13.80 a day after hedge fund manager William Ackman, the biggest shareholder, said he had sold his entire stake after his campaign to overhaul the company failed.
Best Buy lost 2.2 per cent to $35.03. Richard Schulze, the electronics retailer’s founder and largest shareholder, said he plans to sell an undisclosed amount of its stock to diversify his assets and raise money.
Shares of Tiffany & Co also dipped 2.4 per cent to $79.74, as strong sales in China and higher prices made up for some disappointing business at home in the latest quarter.
– (Additional reporting: Bloomberg/Reuters)