Markets mark time due to macro unease
Davy downgrading of Paddy Power stocks to underperform hits price
The downgrading of Paddy Power by Davy Stockbrokers was the biggest talking point on the Dublin exchange yesterday. The share ended the day down 5.69 per cent, having gone lower and bounced back during the course of trading. However, traders noted that the number of shares traded was modest.
Overall traders said that after a busy three months the macro situation was no longer as positive as it had been and this was prompting the ease off in investment and a “flight to safety” mentality.
The Iseq did well in comparison with its counterparts, ending the day up 0.48 per cent. The main stocks traded were Paddy Power, Elan and Bank of Ireland. Davy said that in its view Paddy Power remained, by some distance, the highest quality name in the European gaming sector, but that it had nevertheless taken the decision to downgrade the stock to underperform. The brokers have had an outperform tag on the stock since 2009.
The stock closed at €61.53, a fall of €3.71 or 5.69 per cent.
The board of drugmaker Elan yesterday rejected a formal bid from Royalty Pharma, saying the US investment firm's offer of $11.25 a share grossly undervalued the company. The share closed the day yesterday at €9.26, a rise of €0.36 or 4.08 per cent on the day.
Bank of Ireland , having been ahead for most of the morning, closed the day down 0.6 per cent, at €0.16.
, which is due to hold its AGM on Friday, closed the day up 2.21 per cent or €0.03, at €1.39.
rose 1.17 per cent, or €0.07, to close at €6.07. Building materials group
remained unmoved on the day, as did a large number of stocks.
fell 1.81 per cent, or €0.50, to €27.10.
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fell 2.70 per cent, to close at €0.03.
UK stocks closed little changed, erasing an earlier rally, as mining companies declined with metal prices and a report showed sales of previously owned US houses unexpectedly dropped in March.
The FTSE 100 Index slid less than 0.1 per cent to 6,280.62 in London. The benchmark gauge lost 1.5 per cent last week as commodities fell amid worse-than-forecast economic data from China and the U.S. The broader FTSE All-Share Index slipped 0.2 per cent.
Kazakhmys dropped 8.3 per cent to 353.6 pence as copper declined on the London Metal Exchange. Banks helped limit losses on the FTSE 100.
RBS climbed 2 per cent to 286.2 pence, Lloyds added 3.5 per cent to 49.13 pence and Barclays rose 1.1 per cent to 289.5 pence.
rallied 4.4 per cent to 4,870 pence as gold prices climbed for a fifth day in London after the biggest slump in three decades boosted physical purchases.
European stocks rose, rebounding from the biggest weekly drop in five months, as Italy elected a president and the Group of 20 refrained from opposing the Bank of Japan’s stimulus policies.
The Stoxx Europe 600 Index advanced 0.2 per cent to 285.68 at the close of trading. The benchmark gauge pared an earlier gain of as much as 0.9 per cent as US home sales unexpectedly fell. The measure retreated 2.5 per cent last week as economic data from the U.S. to China missed forecasts. It has still risen 2.2 per cent this year.
The dollar slipped against the Japanese yen but remained within a hair’s breadth of the key 100 level after an approval of a massive Japanese easing program, while a mixed bag of earnings from major US companies pressured global equity markets.
While a majority of S&P 500 companies that have reported earnings so far have topped analysts’ expectations, as is typical, a number of high-profile disappointments have raised questions about whether the market’s steep run so far this year may be out of gas. Blue chip stocks like General Electric Co and McDonald’s both fell for a fourth straight day. ( Additional reporting, Bloomberg, Reuter )