Rough day for stocks as Euro markets hit a Thursday trough

Resources and retailers were among the worst performers on a day that saw virtually every sector in the European markets retreat.

DUBLIN

Traders said that the Irish market was weak on Thursday, reflecting the general picture across Europe.

Multinational packaging group Smurfit Kappa dipped 0.41 per cent to €26.73. Dealers pointed out that the stock enjoyed a good recent run and blamed profit-taking in a weak market for its slip.

Low-cost airline Ryanair was off 0.68 per cent at €18.225 on what was a poor day for airlines generally. However, it outperformed rivals such as EasyJet, on the back of a buy recommendation from analysts at investment bank Goldman Sachs.

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Bank of Ireland was down 0.45 per cent to 0.223, with traders noting that the lender was weak throughout the day.

Insulation and building materials manufacturer Kingspan fell 1.88 per cent to €29.70, with investors fearing that weakness in the UK market, evidenced by a disastrous performance from furniture retailer DFS, could hit the Irish company's business.

Property player Hibernia Reit shed 1.06 per cent to €1.40, while its rival Green Reit enjoyed slightly better fortune, adding 0.34 per cent to end the day at €1.46.

LONDON

Furniture seller DFS tumbled 20.6 per cent to 200 pence after reporting that uncertainty about the future amongst British shoppers led to a dip in demand and fewer people coming to its stores. The group's shares were down 24 per cent at one point before clawing back some ground.

The news hit similar stocks vulnerable to shifts in the UK economy. Irish-based but London-listed DIY and builders' supplies specialist Grafton, which generates much of its revenue in Britain, shed 6.36 per cent to close at 714.45p. House builder Persimmon fell 6.7 per cent to 2,259p. Fashion chain Next dropped 6.14 per cent to 4,037p.

Retail sales fell more sharply than expected in May, adding to multiplying signs of inflation depressing consumer spending, the engine of the UK economy.

Aer Lingus and British Airways owner IAG saw shares drop 3.4 per cent to 584p as the group revealed that the IT failure that caused travel chaos for tens of thousands of passengers last month will cost it £80 million.

Budget airline EasyJet shed 2.33 per cent to 1,341p amid generally poor sentiment towards its sector.

Mining giant Anglo American was down more than 6 per cent at 955.1p, following a trend that saw most resource stocks hit across Europe.

EUROPE

Retailers and energy companies dragged most indices lower on Thursday. H&M shares fell 5.5 per cent to 200.5 Swedish kroner after May sales missed forecasts, adding to a string of softer figures from the multinational fashion chain, which blamed tough trading conditions for its poor performance.

Telecoms firm Proximus fell 3.6 per cent to €30.92 after suffering a cut to "sell" from Citi.

Meanwhile, stocks in Athens inched 0.15 per cent lower as its international lenders prepared on Thursday to unblock as much as € 8.5 billion in loans that Athens desperately needs next month to pay its bills.

The pan-European STOXX 600 benchmark fell to its lowest since April 24th before paring some losses and ended down 0.4 per cent. Euro zone stocks and blue-chips fell 0.6 per cent. Basic resource stocks fell 1.7 percent while energy stocks fell 0.6 percent.

Energy stocks are the worst-performing in Europe this year, and the only sector to have fallen year-to-date. Europe’s retail index fell 2.2 per cent, the biggest sectoral faller on the day.

US

Wall Street fell on Thursday as a recent selloff in technology stocks deepened and investors fretted about the economy's health as the Federal Reserve raises interest rates.

The S&P technology sector fell 0.5 per cent, continuing a slide that began last Friday, although it had been down more earlier. Apple shares fell 0.8 per cent while Google parent Alphabet dropped 1 per cent after separate bearish analysts reports on the two tech heavyweights.

The consumer discretionary sector dropped 0.5 per cent, as Amazon. com shares fell 1.4 per cent.

Nike was off 3.3 per cent after the company said it would cut about 2 per cent of its global workforce and eliminate a quarter of its shoe styles. Tech and consumer discretionary have been among the sectors that have charged the benchmark S&P 500's 8.5 per cent rally this year.

– Additional reporting: Reuters