Draghi warning dampens enthusiasm
Euro zone markets slid as European Central Bank chief Mario Draghi warned of the downside risks to the region’s economies. Draghi also said policymakers would monitor the impact of a stronger euro, forcing the currency to a two-week low, down 0.9 per cent to $1.336.
Ireland’s stock market index inched ahead 1.2 per cent as buyers clamoured to unpick the implications of the promissory note deal.
Bank of Ireland lost 3.7 per cent to 13 cent as investors fretted about the impact of the liquidation of IBRC on the bank. Stock volumes were high and the shares traded lower towards the close of business.
Building materials business CRH got off to a strong start as its peer Heidelberg reported robust figures. However, the stock dipped towards the end of the day as swings with the euro hit gains. Shares finished up 0.6 per cent at €15.34.
Smurfit Kappa rose for a second day in a row after it reported bumper full-year 2012 results. Pretax profits gained 11 per cent and dividends soared 37 per cent. Shares ticked up 4.7 per cent to €11.
Pharmaceutical group Elan shares bounced up 2.84 per cent to €7.24 following a poor performance after its deal with Biogen to sell its interests in drug Tysabri.
Airline Ryanair took on 1 per cent to €5.67, following the news that rival Flybe could create a new air carrier if Michael O’Leary’s bid for Aer Lingus is successful.
Britain’s blue-chip shares fell sharply yesterday as traders took profits on the index which has outperformed Europe this year. The FTSE 100 closed down 66.92 points, or 1.1 percent, at 6,228.
Banks were among the biggest fallers on Thursday, with the sector dropping 1.6 per cent after Bank of England governor Mark Carney outlined a tougher line on the sector.
Royal Bank of Scotland dropped 1.13 per cent, to 339.2 pence, Lloyds TSB gave up 0.23 per cent to 52 pence and HSBC reversed 0.6 per cent to 708.7 pence.
Burberry Group, which was the worst-performing blue-chip stock, tumbling 4.6 per cent.
Rival luxury goods companies also fell as traders cited a Chinese advertising ban on certain expensive gift items as hurting the sector
European stocks were little changed as France and Spain sold debt, while Mr Draghi said economic recovery should begin later this year amid a continued accommodative policy.
Vodafone Group contributed the most to gains by a gauge of telecommunications shares after reiterating its forecast for the year through March. Banca Monte dei Paschi di Siena advanced for a third day.
DNB ASA climbed to its highest price since June 2011 after increasing its dividend.
Shares stateside fell yesterday after the euro currency dropped against the safe-haven dollar and yen, raising worries about Europe’s outlook and curbing investors’ appetite for risky assets such as stocks.
The euro sank after Mr Draghi said the exchange rate was important to growth and price stability, which investors took as a sign the bank is concerned about the euro’s advance in recent days.
Consumer-discretionary and technology companies lost at least 0.5 per cent to lead declines in the SP 500.
Apple was up 0.5 per cent after climbing as much as 2 per cent. Greenlight Capital sued to try to block Apple from adopting a measure at its February 27th shareholder meeting that would amend the its charter to eliminate preferred stock.
US stocks have been in an uninterrupted uptrend for most of the year, with the SP 500 gaining more than 5 per cent for 2013, as US lawmakers reached a budget compromise and companies reported better-than-estimated earnings.
– (Additional reporting: Reuters/Bloomberg)