European shares stall as investors offload stock

A rally in European shares stalled on Friday as investors sold large tranches of stock in a number of companies and there were indications that the continent's recovery is struggling.

DUBLIN

A number of leading stocks were down on Friday, leaving the main index trailing by three quarters of one per cent.

International packaging group, Smurfit Kappa, fell 2.04 per cent to €20.90 after just shy of 1.1 million of its shares changed hands. Bookmaker Paddy Power Betfair slipped 2.09 per cent to €103.10 in Dublin. Its chairman, Gary McGann, is joining Aryzta, but is expected to stay with the group. He is also on the Smurfit board.

Ryanair was down 2.21 per cent at €12.42. Just over 900,00 of its shares traded on Friday.

Insulation and building materials group, Kingspan, slid 2.55 per cent to close at €24.265.

Index heavyweight CRH was flat at €30.075. Also unchanged was AIB at €6.00 despite news that the lender believes it should soon be able to pay a dividend.

LONDON

Sports Direct International Plc rallied 5.5 per cent after saying founder Mike Ashley will take over as chief executive officer, replacing Dave Forsey. Among other stocks moving, Nestlé SA declined 1.7 per cent as analysts said a company presentation on Thursday suggested organic sales growth may be lower than expected.

Mining shares were the top-performing FTSE stocks, led by Glencore which finished up 5.5 per cent as the Fed's decision pushed down the US dollar, making commodities cheaper for holders of other currencies.

Persimmon rose 2.3 percent after Liberum upgraded the stock to "buy" and raised its price targets for the sector, saying sales had picked up and risks had faded. Credit Suisse also raised its volume forecasts for the British housing market, following resilience in data following the Brexit vote in June.

Shares in Bellway and Barratt Developments were up 3.4 per cent and 2.1 per cent respectively, while Berkeley gained 0.9 per cent.

EUROPE

The continent's lenders led a general slide across markets. The Stoxx Europe 600 Banks index fell 1.5 per cent, the top sector faller. It remains the weakest performer so far this year on concerns over falling profitability levels and capital shortfalls in a low-growth, low-rates environment. Banco Santander, Bankia, Intesa and Sanpaolo fell 2 to 3 per cent.

Deutsche Bank, down 2 per cent and trading near a record low, has been in focus after the US sought $14 billion to settle claims related to the sale of mortgage-backed securities, and German politicians are increasingly concerned about the company's finances. Banco de Sabadell lost 4.2 per cent.

CaixaBank SA lost 3.8 per cent, helping send lenders to the biggest decline among sectors, after it sold shares for €1.3 billion to pay for its takeover of Portugal's Banco BPI SA.

Among other sharp movers, Lundbeck slumped more than 15 per cent, the biggest Stoxx 600 faller, after the Danish drug maker's highly anticipated idalopirdine Alzheimer's drug failed in a late-stage study.

On the positive side, Aryzta surged nearly 10 per cent to 43.36 francs, the top gainer in the Stoxx 600 index.

US

US shares were down in early afternoon trade as dealers weighed values following a three-day rally.

Twitter shares jumped as much as 23 per cent to $22.89, posting its biggest one-day percentage gain since its market debut in 2013, after sources said the microblogger has initiated talks to explore a sale.

CNBC earlier reported suitors for Twitter could include Alphabet's Google and Salesforce. com. Salesforce was down 5.1 per cent at $70.77 and Alphabet was little changed at $815.86. Facebook was down 1.3 per cent at $128.41 after the Wall Street Journal reported the social media giant overestimated viewing time for video ads by 60-80 per cent for two years.

Bats Global Markets jumped 21 percent to $32.10, a day after Bloomberg reported CBOE Holdings is in talks to buy the stock exchange. CBOE was up 1.5 percent at $70.47.

– Additional reporting: Bloomberg, Reuters