Three-day winning streak for European shares ends

A three-day winning streak for European shares came to an end on Thursday as banks fell following a set of cautious minutes from the US Federal Reserve, while energy stocks also weighed on investor sentiment during a busy day for company results.

Minutes from the Federal Reserve’s latest meeting showed policymakers were growing more cautious about recent weak inflation, with some calling for a pause in interest rate hikes.

Dublin

The Iseq closed down 1 per cent, underperforming the major European markets, as one of its biggest stocks, Ryanair, declined more than 2 per cent to €18.98. The airline made strong gains throughout the week, but on Thursday it was confirmed that Germany's Lufthansa would have first say in the formal talks for the sale of the insolvent Air Berlin.

Building materials group CRH fell 0.75 per cent to €29.95, Bank of Ireland retreated 0.9 per cent to €7.12 and bookmaker Paddy Power Betfair fell 2.4 per cent to €81.90.

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Cairn Homes closed down 1.2 per cent at €1.62. The property company announced plans to convert founder shares into ordinary shares.

Paper and packaging group Smurfit Kappa rose 0.5 per cent to €25.31. Dalata Hotel Group was one of the other stocks to post a gain, adding 1 per cent to €5.04, while food group Glanbia also advanced, closing up 1.35 per cent at €16.84.

London

Banks wilting on the prospect of slower US rate hikes dented Britain's major share index on Thursday, and Kingfisher also weighed after a weaker quarterly sales performance. The FTSE 100 fell 0.6 per cent, breaking a three-day winning streak.

RBS, Standard Chartered and Barclays were among the biggest fallers. They helped financials take 21 points off the index overall after several Fed members called for halting interest rate hikes following recent weak inflation.

Europe's largest home improvement retailer Kingfisher fell 4 per cent after it reported another decline in quarterly sales, weighed by its B&Q business in the UK and weak sales in French chains Castorama and Brico Depot.

Gains from gold miners Randgold and Fresnillo, up 1.8 to 3.8 per cent, capped losses for the index as gold prices edged up, benefiting from a weaker US dollar. Admiral stumbled again, down 2.3 per cent after Wednesday's sharp results-driven losses.

Meanwhile, mid-caps fell 0.4 per cent, weighed by Hikma. The drugmaker fell 10.5 per cent after cutting its revenue guidance for the year, saying increased competition in its generics business hit prices and volumes for its first half.

Europe

The pan-European Stoxx 600 index fell 0.6 per cent, while euro-zone blue chips declined 0.7 per cent. In Germany, the Dax fell 0.5 per cent, while the Cac 40 in France was down 0.6 per cent.

European banks, which benefit from higher interest rates, were the worst-performing sector, down 1.6 per cent with Deutsche Bank and Commerzbank leading the Dax lower with losses of 2.8 to 3 per cent. Société Générale, Credit Agricole and BNP Paribas were the top drags on France's Cac, down 1.6 to 2.3 per cent.

Earnings updates drove sharp moves, with Swiss toilet and plumbing supplies maker Geberit tumbling 5.8 per cent after posting weaker-than-expected second-quarter results.

Wienerberger plummeted 9.6 per cent after the Austrian brickmaker flagged a bleaker outlook for the UK construction market, which accounts for 10 per cent of its full-year outlook.

US

Wall Street stocks tumbled and treasuries rose on rising speculation that President Donald Trump’s pro-growth policy agenda is in peril following a rebuke by business leaders.

The S&P 500 Index and Dow Jones Industrial Average both slid more than 0.6 per cent and treasury yields turned negative, while the dollar strengthened.

Trump disbanded two advisory councils staffed by chief executives and slammed Republican members of Congress who were critical of his recent remarks on race.

Cisco fell 3.5 per cent in early trading after reporting a revenue miss in its closely-watched security business. WalMart was down 1.7 per cent after the retailer reported a drop in margins due to continued price cuts and investments in its ecommerce operations. – (Additional reporting: Reuters/Bloomberg.)