Global equity markets tumble but US steadies nerves

Global equity markets tumbled again yesterday as investors continued to worry about world growth and on fears that Europe’s debt crisis was waking up from a two-year slumber, while crude oil slumped to a four-year low.

However, new data indicating strength in the US economy helped major US, European and pan-world stock indexes to pare losses and cut the bid for safe-haven government debt, driving up yields.

DUBLIN

It was a very volatile session for the airlines yesterday, with low oil prices pushing stock prices up, and Ebola fears pushing them down. Aer Lingus and

Ryanair

both ended the day down, declining 0.7 per cent and 0.8 per cent to €1.31 and €6.82 respectively.

Fyffes also declined, falling 3.8 per cent to 95 cent, after Brazil's Cutrale Group and Safra Group boosted their offer to buy Chiquita Brands International to about $658 million. It is now looking increasingly likely that the Chiquita merger with Fyffes will not go ahead, according to one stockbroker.

C&C remained weak, with relatively light volumes traded. The company ended the day down 4.2 per cent at €3.71.

Index heavyweight CRH was also down, declining 0.5 per cent to €15.86. Paddy Power rose 1.5 per cent to €53.33.

Overall, the Iseq index of Irish shares closed down 0.7 per cent at 4,347.77.

LONDON

Markets endured a second day of turmoil as the FTSE 100 Index tumbled heavily before recovering to finish little changed from the start of the session.

Shire, which on Wednesday plunged the most in 11 years, tumbled 7.3 per cent to 3,718 pence yesterday, after AbbVie’s board formally asked shareholders to vote against its takeover of the company.

Man Group advanced 3.1 per cent to 111.7 pence. The world’s largest publicly traded hedge-fund manager said assets under management jumped 25 per cent in the third quarter, in line with some analysts’ estimates, helped by acquisitions in the US.

Tesco shares were down another 2 per cent after it emerged that billionaire investor Warren Buffett's Berkshire Hathaway firm had reduced its stake in the troubled retailer to under 3 per cent.

The FTSE 100 closed down just 0.3 per cent at 6,195.91 points after hitting its lowest level since June 2013 at 6,072 points earlier in the session.

EUROPE

European equities trimmed their losses late yesterday after hitting a 13-month low on concern that global growth is slowing, and US shares recovered following new releases of economic data and a Fed official’s comments on bond purchases.

The Stoxx 600 extended losses in the morning after Spain’s government raised €3.2 billion in bond actions, below its maximum target of €3.5 billion.

Air France-KLM rose 6.5 per cent on news that its pilot unions had reached an agreement on the airline's low-cost unit Transavia France.

Nestlé slipped 3 per cent to 64.95 Swiss francs. The world’s biggest food company said nine-month sales excluding acquisitions increased 4.5 per cent, missing the 4.7 per cent gain expected by analysts.

Germany’s DAX rose 0.1 per cent and France’s CAC fell 0.5 per cent. The Stoxx Europe 600 Index lost 0.4 per cent.

US

Stocks on Wall Street rebounded in early trading yesterday as a flurry of economic reports helped to ease fears a weakening global economy would begin to affect the United States.

Data on Thursday painted a more optimistic picture of the US economy, as initial jobless claims fell to their lowest level in 14 years, after a disappointing retail sales report added to investor jitters.

Netflix slumped 22 per cent after reporting third-quarter subscriber growth that missed the company’s forecast.

EBay, which will spin off the PayPal payments business, fell 5.7 per cent after its fourth quarter sales projection missed estimates. – (Additional reporting: Bloomberg, Reuters)