European shares give up gains after DAX touches new 2016 peak

European shares ended lower after a strong start yesterday, with Germany’s DAX briefly touching a new peak for 2016. Early sentiment was knocked, however, by mixed earnings on Wall Street and in Europe.

The pan-European Stoxx 600 index ended down 0.4 per cent.

The German stock market outperformed after data showed that German business morale had improved unexpectedly in October, suggesting company executives have become more optimistic about the growth prospects for Europe’s largest economy.

DUBLIN The Iseq index of leading shares closed down 1 per cent or 65.41 to finish at 5.969.85, with Applegreen, Kerry, Total Produce and Smurfit Kappa among the day’s big movers.

Forecourt operator Applegreen was one of just a handful of companies to end the day in positive territory. It ended the day up 1.6 per cent to €4.32. Total Produce also jumped 1.6 per cent to close at €1.72, while Green Reit was up 1 per cent to €1.41.

Shares in cardboard box-maker Smurfit Kappa closed down just over 1 per cent to €20.06, while Kerry also slipped, losing 1.5 per cent to end the day at €68.35.

LONDON

Britain’s top share index climbed, boosted by basic resources stocks, with

Anglo American

leading the market higher after a production update.

Anglo American

shares were up 4.6 per cent, taking its year-to-date gains to more than 270 per cent and making it the top performing stock on Britain’s blue-chip FTSE 100 index and Europe’s Stoxx 600 this year.

The UK mining index, up nearly 90 per cent this year, rose 3.7 per cent to its highest since mid-2015.

The FTSE 100 index was up 0.5 per cent at 7,017.64 points at its close after slipping in the previous two sessions, also helped by a fall in sterling. Shares in hotel operator Whitbread fell 3.7 per cent and were the top faller on the index, after the company said sales growth slowed and margins declined at its Costa Coffee chain, overshadowing a better-than-expected first-half profit.

Separately, a spate of broker downgrades weighed on the FTSE 250, which slipped 0.3 per cent.

Countrywide, Laird, Howden Joinery, Mitchells & Butlers and Aldermore all dropped between 3.3 to 7.9 per cent, with almost every brokerage citing concerns about a post-Brexit economic slowdown impacting these businesses.

EUROPE

European shares turned lower after a positive start, dropping along with US stocks, which were also hindered by weaker earnings.

Italy's Banca Monte Paschi dei Siena ended 15 per cent lower, having at one stage been 25 per cent higher, after it announced a new strategic plan.

Among risers, UPM surged 10.8 per cent after the paper maker posted higher profits and flagged restructuring plans, while Luxottica climbed 4.4 per cent after the Italian eyewear maker reported higher revenues and confirmed its 2016 outlook.

NEW YORK

US stocks fell on disappointing earnings reports, while the dollar slipped from multi-month highs after Bank of England Governor Mark Carney cast doubt on expectations for more monetary stimulus.

Oil prices fell more than 1 per cent, with US crude breaking below $50 per barrel for a second straight day. On Wall Street, nine of the eleven sectors in the benchmark S&P 500 stock index closed lower, with housing and consumer products companies among those failing to live up to forecasts on third-quarter earnings.

The Dow Jones fell 53.76 points, or 0.3 per cent, to 18,169.27, the S&P 500 lost 8.17 points, or 0.38 per cent, to 2,143.16 and the Nasdaq dropped 26.43 points, or 0.5 per cent, to 5,283.40.

– (Additional reporting: Reuters/ Bloomberg)