Europe shares fall on disappointing economic data

European shares fell sharply yesterday as disappointing economic data from the US further undermined sentiment already hurt by weak earnings updates.

Data showed the service sector in the world’s biggest economy slowed more than expected in January, raising worries that weakness in manufacturing is spreading to other sectors.

DUBLIN

Dublin’s Iseq index of shares closed 2 per cent down at 6,228, tracking movements elsewhere in

Europe

.

Paddypower Betfair suffered its first reversal in weeks dropping €2 or 1.4 per cent to close at €137. The bookmaker's shares had been on a stellar run in the lead up to the merger, which took place on Monday.

Iseq heavyweight Ryanair dropped nearly 3 per cent to €14.07 in the wake of a 6 per cent bounce in oil prices.

Further concerns about the health of the global economy saw shares in building materials group CRH fall by 2.2 per cent to €23.07.

Other fallers included Smurfit Kappa which fell 0.2 per cent to €19.79 and Kingspan which dropped 3.5 per cent to €22.67.

The retreat in financial stocks around Europe saw Bank of Ireland fall 3.5 per cent to €0.27.

LONDON

London’s FTSE 100 Index dipped sharply amid mixed powerhouse service sector figures from UK and the US.

The stock market debut of Clydesdale and Yorkshire Bank saw the lender rise to 192p in conditional trading as it pressed ahead with its £1.6 billion flotation despite market volatility and after being hit by a last-minute delay. The Glasgow-based lender – now known as CYBG – was forced to put the brakes on its initial public offering for 24 hours on Tuesday following a "specific request" for more information from a credit ratings agency.

The biggest risers on the FTSE 100 Index were Anglo American up 21.6p at 273.7p, Rio Tinto up 67.5p at 1685p, Glencore up 2.8p at 86p and Antofagasta up 10.1p at 375.6p.

EUROPE

Finnish state-controlled utility

Fortum

slumped 13 per cent after fourth-quarter earnings dropped more expected and dividend fell short of expectations.

Danish drugmaker Novo Nordisk fell 7.6 per cent after cutting its long-term profit growth target, while Dutch telecoms group KPN fell 1.2 per cent after reporting worse-than-expected core earnings.

However, Syngenta rose 2.7 per cent after China's state-owned group ChemChina agreed to buy the Swiss company for $43 billion, the largest overseas acquisition by a Chinese company. Syngenta remained below the agreed price with some brokers saying the deal carried high execution risks.

Luxury goods group LVMH also climbed 4.5 per cent after reporting that fourth-quarter sales grew more than expected, but watch-maker Swatch tumbled after it reported lower profits and sales.

NEW YORK

US stocks retreated as the bear market in financial shares deepened amid a litany of global growth concerns.

Crude rallied past $31 a barrel in New York, while the dollar plunged to a three-month low versus the euro after disappointing services data.

The Standard and Poor’s 500 Index headed for its first three-day slide in four weeks as bank shares plunged 2.6 per cent.

Financial firms in the S&P 500 plunged 1.4 per cent, bringing the loss this year past 12 per cent.

Legg Mason and Charles Schwab have lost more than 29 per cent to pace declines, while investment bank Morgan Stanley is down 25 per cent.

"This is an emotional, sentiment-driven market and it's likely to remain tied to oil," Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, said by phone.

– (Additional reporting: Bloomberg, Reuters)