Hurricane Sandy closes US markets
HURRICANE SANDY was the main focus of interest for markets yesterday, as the storm prompted the closure of Wall Street and European stock markets were weaker, driven downwards by the insurance sector amid fears that the hurricane may hit insurers’ profits.
Investor thoughts continued to be preoccupied by the possible timing of a Spanish bailout, as Italian Prime Minister Mario Monti and his Spanish counterpart Mariano Rajoy met in Spain.
DESPITE THE bank holiday, the Iseq index remained open yesterday, though there was little activity, due in part to the closure of the US markets.
The Iseq index closed off a quarter of a per cent, though on very light volumes.
Due to the bank holiday in Ireland, there were no corporate announcements, and minimal company activity.
Food company Glanbia was one of the most actively traded stocks yesterday, ahead of a series of shareholder votes next month, at which co-op members will be asked to vote on the plc’s proposed joint venture with Glanbia co-op. Around 400,000 Glanbia shares were traded yesterday, though the stock finished down a half a per cent in line with the market at €7.56. Kerry Group, which will publish an interim management statement tomorrow, advanced, finishing the session up 0.3 per cent at €41.37.
CRH also advanced towards the end of the session, closing up 0.3 per cent at €13.87.
Independent News and Media advanced by 8 per cent to €0.10, as speculation continued about the group’s strategic direction.
Kenmare Resources continued its performance of late, slipping by 3 per cent to finish at €0.47.
Having fallen early in the day, UK stocks ended the day only fractionally lower, finishing 0.2 per cent off.
BT lost 1.4 per cent following reports that the UK’s largest fixed-line phone company may cut its full-year sales forecast.
The company, which will report second-quarter earnings on Thursday, previously said it expected underlying revenue growth to improve in accounting years ending March 2013 and 2014.
Hargreaves Lansdown the UK’s largest retail broker, dropped 4.4 per cent to 725.5 pence after Citigroup lowered its rating on the shares to sell from neutral.
BP slid 1.3 per cent to 426.1 pence after crude oil prices dropped for the first time in three days. Premier Foods jumped to the highest level in more than four months after a report said the company may seek a bid.
EUROPEAN STOCK markets finished down yesterday, snapping a three-day advance as Hurricane Sandy propelled towards the east coast of America, closing stock markets and threatening further closures today.
France’s CAC 40 lost 0.8 per cent, while Germanys DAX slid 0.4 per cent. Greeces ASE tumbled 6.3 per cent.
A gauge of insurance companies posted the biggest decline of the 19 industry groups on the Stoxx Europe 600 Index.
A gauge of insurers dropped 1.2 per cent as Munich Re and Swiss Re AG, the worlds two largest reinsurers, retreated 2.22 per cent to €121.65 and 2.5 per cent to 63.25 Swiss francs, respectively.
As Italian prime minister Mario Monti met his Spanish counterpart in Madrid, Italian banks declined as Banca Popolare di Milano Scarl dropped 4.4 per cent to 42.5 cents. Intesa Sanpaolo SpA lost 2.7 per cent to €1.24.
In Spain, Bankia, which reported a nine-month loss of €7.05 earlier last week, slid 4 per cent to €1.10.
National Bank of Greece SA tumbled 17 per cent to €1.99, its biggest plunge in a year.
ThyssenKrupp AG, which sold its construction components business to Kingspan earlier this year, dropped 3.9 per cent to €17.16. Germanys biggest steelmaker asked companies to resubmit offers for its unprofitable Americas unit after deciding the original bids were too low, according to reports.
UBS AG rose 7.3 per cent after Switzerland’s largest bank was said to have decided to cut as many as 10,000 jobs amid a plan to retreat from capital-intensive trading.
On the bond markets, Spanish and Italian government bonds fell after a report showed Spain’s retail sales slumped in September, underscoring the nation’s deepening recession as its government resists seeking a sovereign bailout.
The extra yield investors demand to hold Spain’s 10-year bonds instead of similar-maturity German bunds widened for a third day as Prime Minister Mariano Rajoy said he’ll request a bailout when he judges it’s in the nation’s interests.
Italian two-year notes dropped for a sixth day, the longest run since May, after former premier Silvio Berlusconi’s party threatened to topple the government by withdrawing its support. Bunds advanced as investors sought the region’s safest assets.