Ryanair weighs on Iseq as trade tensions drag European stocks down

In Dublin housebuilders Cairn Homes, Glenveagh Properties, and Abbey close down

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The Iseq index in Dublin underperformed, as Ryanair accompanied news of an earnings drop with a forecast that average fares will be lower than expected in the key summer period.

Wider sentiment across Europe was also depressed as investors continued to worry about trade tensions following the US’s threat last week to slap tariffs on $500 billion (€427.4 billion) of Chinese imports.

The Iseq index fell by 1.02 per cent to 6,864.64, while the pan-European Stoxx 600 index dipped 0.2 per cent to 384.88.

DUBLIN

Ryanair – which makes up almost 9 per cent of the Iseq – slid by 6.7 per cent to €14.51. The budget airline said before trading got underway on Monday that weaker fares, higher staff and fuel costs served to push its first-quarter profit to the end of June down 20 per cent on the year.

The company also said that average fairs will be dented during the crucial summer months as a result of high competition, unusually hot weather across Europe and uncertainty caused by a series of strikes at the carrier.

Housebuilders were also out of sorts, with Cairn Homes down 2.2 per cent to €1.70, Glenveagh Properties, which moved last week to raise more than €200 million for further land purchases, falling 1.8 per cent to €1.12, and Abbey declining by 4.4 per cent to €15.20.

However, insurer FBD advanced 1.5 per cent to €10.40, on hopes that policymakers will do more to cap personal injury payouts. The Sunday Times reported over the weekend that a government-commissioned document showed that such payouts in Ireland are running at about 4.4-times the UK average.

LONDON

The blue-chip FTSE 100 index closed down 0.3 per cent at 7,655.79 points. A stronger pound earlier in the session weighed on the FTSE’s dollar-earning exporters, with large consumer staples including British American Tobacco, Diageo and Reckitt Benckiser taking the most points off the index. However, the pound gave up early gains to trade lower by the end of the session.

Cyclical stocks were also on the back foot, with financials and miners broadly lower.

These stocks, which tend to experience relatively bigger price swings, have come under pressure as risk appetite has been dented by uncertainty over the outlook for global trade.

Ryanair’s cautious fares outlook sent shares in EasyJet and International Airlines Group, which owns Aer Lingus, down more than 1.5 per cent.

McColl’s Retail Group dropped 13.8 per cent to the bottom of the small-caps index after the convenience retailer gave a muted forecast and reported a drop in first-half like-for-like sales.

EUROPE

Fiat Chrysler fell by as 1.5 per cent to €16.17 after chief executive Sergio Marchionne fell seriously ill following complications from shoulder surgery, prompting the group to name the head of its Jeep division, Mike Manley, to take over.

French IT services group Atos dropped 6.7 per cent after the company reported revenue growth of only 1.5 per cent for the second quarter and unveiled a deal to buy Michigan-based peer Syntel for $3.4 billion.

NEW YORK

US stock indexes were treading water in early afternoon trading on Wall Street, as gains in financials were offset by losses in Amazon and industrials, as investors waited for earnings reports from marquee corporations to assess the impact of an escalating US-China trade conflict.

The Dow Jones Industrial Average was down 0.07 per cent, at 25,039.60, while the S&P 500 was up 0.03 per cent and the Nasdaq Composite dipped 0.03 per cent.

Amazon. com slipped after US president Donald Trump renewed his attacks on the retailer.

However, Hasbro shares jumped after the toymaker’s quarterly revenue and profit topped analysts’ estimates.

Tesla’s shares fell after a report that the electric car maker has turned to some suppliers for a refund of previously made payments in a bid to turn a profit.

– Additional reporting, Reuters

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