Indexes retreat as European values slide

Iseq ends session lower almost 2% down with Paddy Power most significant mover

European stocks declined, after yesterday rallying the most in three weeks, as retailers fell, the shutdown of the US government entered its second day and the European Central Bank announced no new stimulus measures.

National benchmark indexes retreated in 12 of the 18 western-European markets. The UK’s FTSE 100 fell 0.4 per cent, Germany’s DAX lost 0.7 per cent and France’s CAC 40 Index retreated 0.9 per cent.

In Dublin, the Iseq closed down 0.17 per cent to settle at 4,275.65 in what was described as a “moderately busy day” by one trader.

Paddy Power was the most significant mover, with the bookmaker rising 0.76 per cent to €59.85 with quite a bit of buying interest evident in the stock.


Among the losers on the day, food group Glanbia finished 1.6 per cent lower at €9.50. This was the company's sixth successive day of decline and signals some profit taking, according to traders.

Aer Lingus's recent slippage continued, with it closing down 1.4 per cent to finish at €1.46. Ryanair was 0.7 per cent lower at €6.341. Both airlines have booked profit warnings recently and are aggressively selling fares into the market to fill aircraft.

Values retreated for a fourth day, the longest losing streak in almost two months.

Unilever declined 1.7 per cent, heading for the biggest weekly drop in three years as UBS lowered its recommendation on the shares.

Wolfson Microelectronics tumbled the most in more than two years after its fourth-quarter sales prediction trailed analysts’ forecasts.

The FTSE 100 Index lost 22.51 points, or 0.4 per cent, to 6,437.5 at the close in London, a one-month low.

However, the gauge has rallied 9.2 per cent this year as the Bank of England gave forward guidance on interest rates for the first time and the US Federal Reserve maintained its monthly bond purchases. The broader FTSE All-Share Index also fell 0.4 per cent.

ECB president Mario Draghi refrained from signalling that any further measures are needed to boost Europe's economic recovery.

Unilever slid 1.7 per cent to 2,319 pence. The world's second-biggest consumer-goods company has retreated 5.6 per cent this week, the biggest drop since August 2010, after sales growth slowed in the third quarter.

Hochtief slumped 7.9 per cent after the Sydney Morning Herald reported allegations of corruption at the company's Australian business.

KappAhl dropped 9.8 per cent after the clothing retailer proposed paying no dividend this financial year.

Portugal Telecom jumped the most in almost four months after agreeing to merge with Brazil’s Oi SA to form a network operator with 100 million subscribers.

The Stoxx Europe 600 Index slipped 0.7 per cent to 310.79 at the close in London, its biggest slide since August 30th.

Stocks fell in early trading, after the Standard and Poor's 500 Index rose the most in almost two weeks. Investors watched for progress in efforts to end an impasse over federal spending as the shutdown entered a second day.

Monsanto dropped 1.6 per cent as the world’s largest seed company gave a full-year earnings forecast that trailed analyst estimates.

Alcoa slumped 2.3 per cent after Deutsche Bank lowered its rating on the aluminium producer.

Global Payments rallied 11 per cent after boosting its earnings forecast.

Benchmark indexes pared losses as US president Barack Obama summoned the top four leaders of Congress to the White House for the first high-level talks on reopening the US government and raising the debt ceiling. – (Additional reporting by Bloomberg)

Ciarán Hancock

Ciarán Hancock

Ciarán Hancock is Business Editor of The Irish Times