Fiat stalls on disappointing earnings

Iseq falls 1.13 per cent, dragged down by CRH decline of 3.4 per cent to €20.47

European stocks were little changed yesterday as disappointing earnings from Fiat to Société Générale offset a rally in Crédit Agricole after its profit surged, while investors watched the crisis in Ukraine.

National benchmark indices fell in 10 of the 18 western European markets. The UK’s FTSE 100 slipped less than 0.1 per cent, France’s CAC 40 added 0.4 per cent and Germany’s DAX climbed 0.6 per cent.

In Ireland, the Iseq overall index fell by 1.13 per cent to 4,848.80, dragged down by building materials group CRH.

CRH closed down 3.4 per cent yesterday at €20.47. In an interim management statement, the company said its earnings before interest, tax, depreciation and amortisation in the first half of this year is expected to be €100 million higher than last year at about €500 million.


The company said the improving trend evident in Europe in the second half of 2013 had been maintained in the first four months of 2014, and the economic backdrop continued to stabilise.

Weather patterns in the US were “much less positive” than in Europe and many regions, particularly in the eastern half of the country, experienced very cold conditions that hit early season activity for the second consecutive year. Given normal seasonal weather patterns, CRH expects trading in the Americas to improve in May and June as the 2014 construction season gets under way for its materials operations.

Bank of Ireland closed down 2.6 per cent at 26.7 cent while Aer Lingus and Ryanair also declined.

Smurfit Kappa was one of the main gainers on the day, up 1.5 per cent at €16.60.

The five most traded stocks on the exchange were Smurfit Kappa, CRH, Kerry Group, Bank of Ireland and Ryanair.

UK stocks pared their decline in the final 30 minutes of trading as Russian president Vladimir Putin said Russia has withdrawn its troops from the border with Ukraine. This offset losses by banks after HSBC Holdings reported reduced profit.

HSBC fell 1.3 per cent after Europe's largest bank said first-quarter profit dropped 20 per cent. Barclays declined 0.7 per cent after Citigroup said the lender may push back a profitability target by a year.

J Sainsbury slipped 2.9 per cent after Kantar Worldpanel said the supermarket chain lost market share in the past 12 weeks. Legal and General Group added 3 per cent after reporting earnings.

The FTSE 100 Index slipped 2.12 points, or less than 0.1 per cent, to 6,796.44 at the close in London, paring a drop of as much as 0.5 per cent.

Fiat tumbled the most since August 2011 and Société Générale slid 0.8 per cent. Saint-Gobain lost 3.3 per cent after investor Wendel said it would cut its stake in Europe's biggest building materials supplier.

Crédit Agricole gained the most in almost a year after reporting first-quarter profit had surged 85 per cent. Henkel advanced the most since November 2010 after reporting better- than-estimated earnings.

The Stoxx Europe 600 Index closed little changed at 336.03. The benchmark equity gauge has fallen 0.9 per cent from a six-year high on April 4th.

New York
US stocks mostly rose in early trading yesterday, bouncing off earlier lows after comments from Federal Reserve chair Janet Yellen offered no surprises, but the Nasdaq fell for a second straight day, weighed down by declines in internet-related shares.

The Dow and the S&P 500 moved into positive territory after Ms Yellen said the US economy was still in need of lots of support, given the “considerable slack” in the labour market.

Her comments enabled investors to shift attention to what may be an easing of tensions in Ukraine, as Mr Putin called on separatists in Ukraine to postpone a vote on secession.

Additional reporting by Bloomberg and Reuters

Ciarán Hancock

Ciarán Hancock

Ciarán Hancock is Business Editor of The Irish Times