Fed's growth stance weighs on prices
GLOBAL STOCKS, the euro and oil prices fell yesterday after the US Federal Reserve chairman Ben Bernanke damped expectations for further monetary stimulus.
Poor macroeconomic numbers also weighed on sentiment with data showing German exports slumped more than forecast and further woes from Fitch in the form of a downgrade on Spain’s credit rating.
Madrid bucked the trend, however, with Spain’s Ibex index outperforming all major national indices, amid speculation the EU would this weekend be asked for help with recapitalisation of Spanish banks.
THE ISEQ partially escaped the general weakness across Europe, ending the week in positive territory. The Dublin index closed up 6.32 points or 0.21 per cent at 3,048.
There were a few movers, with many of the big names such as DCC, CRH, Elan and Kerry Group ending the session up.
There were also gains for Origin, which ended up 2.99 per cent at €3.45, Kingspan which was up 3.07 per cent at €6.72 and Donegal Creameries, which climbed 9.38 per cent to close at €3.50.
However, some stocks mirrored the global situation, with Providence Resources down 3.73 per cent at €6.45, Ryanair down 1.6 per cent to close at €4 and Grafton down 1.79 per cent to €2.765.
Independent News & Media closed down after chairman James Osborne and chief financial officer Donal Buggy became the latest to be voted off the board of INM.
The euro lost most of Thursday’s gains, falling to $1.2482 yesterday from $1.2561 the day before.
UK STOCKS dropped, trimming the biggest weekly gain this year for the benchmark FTSE 100 Index.
The retreat in shares was led by cyclical stocks including banks and miners.
Barclays Plc lost 1.3 per cent after a report said the bank’s asset-sales plan has been delayed.
Lamprell Plc plunged 22 per cent after the company forecast a wider fiscal first-half loss.
BHP Billiton Ltd, the world’s largest mining company, lost 2.9 per cent to 1,767 pence and Rio Tinto Group declined 4.8 per cent to 2,869 pence.
Overall, the FTSE 100 slid 0.2 per cent or 12.71 points to 5,435.08 at the close in London after earlier falling as much as 1.2 per cent.
Sterling was also down at 1.24 against the euro and at 1.54 against the dollar, after the Bank of England opted not to print more money.
EUROPEAN STOCKs retreated, paring the Stoxx Europe 600 Index’s biggest weekly gain in four months. German exports and imports fell sharply in April, in the latest sign that Europe’s largest economy is beginning to feel the chill from the euro zone debt crisis.
Fitch slashed Spain’s credit rating by three notches and signalled it could make further cuts as the cost of restructuring the country’s troubled banking system spiralled and Greece’s crisis deepened.
Spain is expected to make a request over the weekend for a financial package to prop up its troubled banks, two senior EU officials and one German source said on Friday. Hennes and Mauritz AB, Europe’s second-largest clothing retailer, fell after Société Générale SA advised investors to sell the shares.
The Stoxx 600 fell 0.3 per cent to 241.93 at the close of trade.
The gauge has still climbed 2.9 per cent this week, the biggest advance since February 3rd, as China cut interest rates.
France’s CAC 40 slid 0.6 per cent the close at 3051.7, while Germany’s DAX was down 0.3 per cent.
US STOCKS reversed an early rally yesterday, with the Nasdaq Composite Index climbing 12.62 points, or 0.45 per cent, at 2,843.64. The Dow Jones industrial average was up 47.19 points, or 0.38 per cent, at 12,508.15. The Standard Poor’s 500 Index was up 4.64 points, or 0.35 per cent, at 1,319.63.
Among the market leaders in the US were Wal-Mart Stores Inc and Intel Corp which both added at least 1.4 per cent to pace gains among the biggest companies.
Facebook Inc, which this week fell to the lowest price since it went public, added 3.7 per cent. McDonald’s Corp, the largest restaurant chain, slid 1 per cent as its May sales trailed analysts’ estimates. Alpha Natural Resources Inc slumped 4 per cent as the nation’s second-biggest coal producer is shutting mines in Kentucky and closing US regional offices. – (Additional Reporting Bloomberg)