Stocks slip as optimism on Spain dims

Sat, Sep 29, 2012, 01:00

STOCKS SLIPPED, Spain’s borrowing costs climbed and the dollar gained against the euro yesterday as initial optimism about Madrid’s debt-cutting plans gave way to anxiety over its troubled banks and faltering global growth.

The biggest market declines were in France and Italy, according to one stockbroker, who attributed the decreases to concerns in Europe and to the French budget, which detailed higher levies on business and a new 75 per cent tax rate.

DUBLIN

THE ISEQ index added just 0.2 per cent or six points to finish the quarter at 3,278.28. Still, this was better than most European markets, which closed down between 1 and 2 per cent.

Amid a quiet day of trading, CPL Resources was the biggest gainer, climbing nearly 10 per cent to close at €3.40.

Also up were Kerry Group and Kingspan, by 2.31 per cent and 1.04 per cent respectively.

Petroneft Resources climbed 4.17 per cent to 10 cent following the publication of 2012 interim results. Oil and gas exploration firm Providence Resources also gained, closing at €8.45, following news that the company is to sell its onshore UK licence interests for $66 million.

Building materials giant CRH, which accounts for about one-third of the index, was virtually unchanged, falling 0.73 per cent to close at €15.00.

Clinical trials firm Icon also lost out, falling 3.49 per cent to €17.95, while financial services business IFG was down 2.76 per cent to close at €1.41.

LONDON

BRITAIN’S BENCHMARK share index fell to its lowest closing level in more than three weeks, as persistent worries over Europe’s debt crisis and the global economy hit markets, while investors said any moves higher would be limited.

The blue-chip FTSE 100 closed down 0.65 per cent, or 37.35 points, at 5,742.07 points, marking its worst close since September 5th.

The index rose 3.1 per cent over the third quarter, but finished the week down 1.9 per cent.

Miners topped the FTSE 100 leaderboard. Gains in Rio Tinto and BHP Billiton added most to the FTSE, as expectations of new stimulus measures from China – the world’s biggest metals consumer – boosted the sector.

Meanwhile, motor insurer Admiral fell approximately 3 per cent, while rival insurer RSA slipped 1.3 per cent, as an Office of Fair Trading inquiry into the private motor insurance market hit the sector.

Support services group Compass also fell around 3 per cent after broker Natixis cut its rating on the stock to “neutral” from “buy”.

EUROPE

STOCKS POSTED their biggest weekly decline since June as concern that the latest round of bond buying in the US will fail to encourage growth offset speculation that China may announce further stimulus measures.

Hennes Mauritz declined 1.7 per cent after SEB and CA Cheuvreux advised investors to sell the shares. Air France-KLM, however, gained 4.6 per cent on the back of a UBS upgrade.

Infineon Technologies slid after predicting sales and profitability will decline, while Telekom Austria sank after cutting its dividend.

Fiat, the Italian automaker that controls Chrysler Group, fell 7.6 per cent. Continental, Europe’s second-largest auto parts maker, sank 8.9 per cent in its first week back in the benchmark DAX index, after being reinstated following a 45-month absence.

The benchmark Stoxx Europe 600 Index fell 2.7 per cent to 268.48 this week. However, the benchmark measure has still advanced 6.9 per cent this quarter, as European Central Bank policymakers approved a plan to buy the bonds of the most indebted members of the euro area. The index added 0.9 per cent in September, for a fourth straight monthly gain.

France’s CAC 40 index dropped 2.55 per cent, while Germany’s DAX index retreated 1 per cent.

NEW YORK

US STOCKS also fell, sending the Standard Poor’s 500 Index toward its worst week since June, as business activity unexpectedly contracted in September.

Nike, the world’s largest sporting goods company, slumped 1.1 per cent to €94.91 after reporting future orders that trailed estimates, as demand sank in China.

Restaurant chain McDonald’s dropped 1.9 per cent after Janney Montgomery Scott cut its recommendation for the shares.

Research In Motion rallied 5 per cent to $7.50, despite reporting a 31 per cent slide in quarterly sales on Thursday after markets closed.

The company reported a narrower loss than analysts had projected, helped by the growth of BlackBerry subscribers in markets such as India, South Africa and Indonesia.

The SP 500 retreated 0.45 per cent to 1,440.67 at the close in New York, paring a loss of as much as 0.8 per cent. The measure has fallen 1.3 per cent this week.

The Dow Jones Industrial Average decreased 0.36 per cent, to 13,437.13. – (Additional reporting: Bloomberg, Reuters)