Shares drop after weak German data

European stocks fell on Tuesday to their lowest level in over a month as weaker-than-expected German economic data ignited investor concerns about the continent’s largest economy.

The Stoxx Europe 600 dropped 1.8 per cent at the close, delivering a third daily decline out of the four most recent trading sessions.

German factory orders fell unexpectedly by 1.2 per cent month-on-month in February, a sign that a global slowdown is weighing on the economy. Economists, on average, had forecast a 0.3 per cent rise in orders.

Wall Street fell sharply as investors took gains off the table following a recent rally and ahead of an upcoming quarterly reporting season that is expected to reveal sharply lower earnings.

Reflecting concerns on Wall Street, IMF managing director Christine Lagarde yesterday warned of increasing risks to global economic growth unless policymakers take stronger measures.

Dublin

The Iseq index fell 1 per cent to 6,222 in what traders described as quiet session with little local tradable news. The benchmark Irish index has been largely range-bound between 6,200 and 6,400 since the end of February.

Bank of Ireland was among the most actively traded, falling 1.9 per cent to 25.5 cents, as followers of the sector focused on rising non-performing loans across Italian banks.

Permanent TSB declined almost 4 per cent to €2.58. CRH, the biggest component of the Iseq, declined 2.3 per cent to €24.21 amid concerns over the global economy. C&C fell 3.2 per cent to €3.86, with dealers saying some investors sought to lock in profits following the stock's advance in recent weeks. Bucking the trend, Kerry rose 2.05 per cent to €83.18, a record closing level, after UK food producer Cranswick delivered a positive assessment of its performance late last year, saying its fourth-quarter sales volumes rose 12 per cent year- on-year. London British shares fell to a three-week low during trading yesterday, led by commodity-related stocks amid falls in oil and metals prices. The blue-chip FTSE 100 index in London ended 1.2 per cent weaker at 6,091.23 points.

The index was dragged down by a 3.1 per cent fall in the UK mining index and a 2.1 per cent fall in the oil and gas sector. Oil prices fell after a surprise drop in US gasoline demand and on doubts whether oil producers can agree an output freeze to dampen a global supply glut.

Shares in BHP Billiton, Anglo American and Rio Tinto fell between 2.4 per cent and 4.6 per cent. Among oil majors, Royal Dutch Shell and BP fell 2 per cent and 2.1 per cent, respectively.

Elsewhere, Tesco fell 1.7 per cent after investment bank Deutsche Bank cut its rating on the stock to "hold" from "buy" on valuation grounds.

Europe
Germany's DAX index stood out as a particularly weak point in Europe, falling 2.6 per cent, underperforming a 1.9 per cent drop for the pan-European FTSEurofirst 300, as weak factory orders weighed on autos.

Shares in ThyssenKrupp dropped 4.7 per cent, among the top fallers on the FTSEurofirst 300. It was down for a second day following confirmation that Brazilian miner Vale will sell its entire 27 per cent stake in the struggling CSA steel plant to the German firm. New York

Following a 13 per cent surge over the past seven weeks, the S&P 500 declined 1 per cent.

The Dow Jones dropped 0.75 per cent to end at 17,603.32 and the S&P 500 lost 20.96 points to 2,045.17. The Nasdaq fell almost 1 per cent.

The S&P financials sector dropped 1.44 per cent, led by Wells Fargo, which lost 2 per cent.

Allergan shares fell 14.77 per cent after the US treasury unveiled rules to curb tax inversion deals, potentially derailing the merger with Pfizer. Pfizer climbed 2.1 per cent. – (Additional reporting: Reuters/Bloomberg)