Euro zone worries weigh on stocks

GLOBAL EQUITY markets were weaker yesterday as China cut its forecast for economic growth this year and data showed that manufacturing and services in the euro area shrank more than estimated.

Nervousness over whether Greece will complete a bond swap with private creditors on Thursday as part of a deal to secure a €130 billion bailout and avoid a debt default also undermined demand for riskier assets, though the euro firmed from near two-week lows.

DUBLIN

VOLUMES WERE relatively strong in Dublin yesterday, traders reported, with plenty of stock-specific news flow as the reporting season continued. However, the Iseq index closed down 40 points at 3,226, with only a handful of names ending the session in positive territory.

Paddy Power was up 2.3 per cent at €46 as the bookmaker reported an underlying pre-tax profit of just over €121 million for last year, up 16 per cent on 2010.

FBD Insurance slipped almost 3 per cent to €8.65 despite posting a very strong set of 2011 results, as the insurance company reported a 60 per cent jump in operating profits to €64.9 million.

Total Produce, which is listed on the ESM market, finished the day flat at €0.46, after the fruit company received regulatory clearance for the acquisition of 50 per cent of Dutch company Frankort Koning.

Fyffes, which last week posted strong results, advanced just over 1 per cent to close at €0.425.

Elsewhere, Ryanair finished off 1 per cent at €4.18 after it reported a 2 per cent fall in February traffic numbers.

LONDON

BRITAIN’S FTSE 100 fell as weakness in miners and engineers outstripped strength in defensive stocks.

London’s blue-chip index shed 36 points or 0.6 per cent to 5,875, although it held within its recent tight range between 5,830 and 5960, in place since early February. Volumes were weak and implied volatility rose 3.3 per cent, suggesting concern had returned among investors, although the level remained at less than half the multi-year peaks set in September 011.

Global miner BHP Billiton, the FTSE’s second-biggest stock by market cap, fell 2.9 per cent, while auto and airplane parts maker GKN, which was looking to China as a key driver of demand for premium cars this year, fell 2 per cent.

Commodities trader Glencore shed 4 per cent as the firm reported in line full-year results and maintained its position over proposed merger terms with Xstrata. Xstrata slipped 4.9 per cent.

Banks were also lower, weighed down by concerns of an outright default for Greece.

Preventing the UK’s benchmark index from falling further was strength in defensive stocks, such as drugmaker GlaxoSmithKline and utility Centrica, which were up 1.0 and 1.3 per cent respectively.

BP, the fifth-biggest stock on the FTSE, was up 1.6 per cent after it reached an estimated $7.8 billion settlement with businesses and individuals affected by the Gulf of Mexico oil spill, lifting some of the uncertainty overshadowing the oil giant’s outlook.

EUROPE

EUROPEAN STOCKS dropped, snapping two days of gains amid concerns about economic growth in China, and concern about Greece.

The Stoxx Europe 600 Index retreated 0.6 per cent to 265.56 at the close, paring last week’s 0.9 per cent advance.

National benchmark indexes declined in every western- European market except Switzerland and Iceland.

France’s CAC-40 Index slipped 0.4 per cent, while Germany’s DAX Index lost 0.8 per cent.

Rio Tinto dropped 3.9 per cent to 3,422 pence, after the world’s third-largest mining company said it will review its Bell Bay aluminium smelter in Australia because of rising costs and falling prices for the lightweight metal.

BHP Billiton Ltd. fell 2.9 per cent to £19.71 and Vedanta Resources slid 3.7 per cent to £14.

Copper declined for a second day in London after China cut its target for economic growth.

NEW YORK

US STOCKS fell, following a three- week advance for the Standard and Poor’s 500 Index.

By late morning, the SP 500 fell 0.7 per cent to 1,360.67 falling for a second day, while the Dow Jones Industrial Average slid 75.27 points, or 0.6 per cent, to 12,902.

Commodity and industrial shares had the biggest losses among 10 groups in the SP 500. Alcoa and Caterpillar slid at least 2.2 per cent. Apple slumped 1.7 per cent, snapping a seven-day rally.

MetroPCS Communications, the pay-as-you-go wireless carrier, and Zynga, the online game company that sold shares to the public in December, declined at least 5.2 per cent after the shares were downgraded. – Additional Reporting: Reuters/Bloomberg