Banks lead the Iseq into negative territory

European shares lower across the board as Spanish political upheaval continues

Bank of Ireland, currently the subject of an enforcement investigation by the Central Bank alongside KBC, dropped by 1.93 per cent to €6.649 on Thursday. Photograph: Aidan Crawley/Bloomberg

Bank of Ireland, currently the subject of an enforcement investigation by the Central Bank alongside KBC, dropped by 1.93 per cent to €6.649 on Thursday. Photograph: Aidan Crawley/Bloomberg

 

The ongoing tracker mortgage controversy appeared to spook Irish investors on Thursday as the Iseq ended in negative territory.

Its European peers, however, didn’t fare much better with the Ftse dropping as much as 0.3 per cent and the pan-European Stoxx 600 index falling 0.66 per cent.

In the US, stocks pulled back from record highs led down by Apple and a slew of worse than expected corporate updates.

Dublin

A weak day in Dublin was lead lower by financials as the controversy surrounding tracker mortgages at a number of Ireland’s banks trundled on.

Both AIB and Bank of Ireland were relatively heavily traded on Thursday and both ended the day in the red. AIB fell by 1.63 per cent to just over €5 while Bank of Ireland, which is the subject of an enforcement investigation by the Central Bank alongside KBC, dropped by 1.93 per cent to €6.649. Permanent TSB took the biggest percentage drop of the financials, albeit on far lower volume, dropping by 2.39 per cent.

Aside from the banks, Ryanair started the day quite weak but recovered in the afternoon to close at €16.08, down by 1.77 per cent. The dip came on a day when the airline reached a settlement with eDreams and Google after accusing the search engine of allowing eDreams to use a misleading subdomain, www.Ryanair. eDreams.com.

Following the trend of others on the Iseq overall index, there was low volume traded on index heavyweight CRH. The stock closed up by 0.51 per cent and it was said that without its positive move the Iseq would have closed considerably lower.

As it stood, the Iseq fell by 0.37 per cent on a day when packaging company Smurfit Kappa was an index leader, closing up by 3.37 per cent.

London

Across the pond, Britain’s main share index fell 0.3 per cent as a weak third-quarter update from Unilever weighed.

Workspace group IWG plummeted 32.2 per cent after warning on profit. It cited natural disasters and weakness in London trading as contributing factors.

On the FTSE 100, Unilever weighed, falling 5.5 per cent after the consumer goods giant’s third-quarter results missed consensus expectations. Unilever blamed poorer weather in Europe for slower than expected sales this summer, particularly impacting ice cream sales.

Support services and construction firm Interserve sank 27.2 per cent on the small-cap index following a warning that it may breach covenants after a further deterioration in trading.

Carillion, which also provides support services to the construction industry, had plummeted earlier this summer after a string of profit warnings.

Europe

European shares were on track for their biggest drop in two months on concerns over political upheaval in Spain and after disappointing results from large companies such as France’s Publicis and Germany’s Kion.

Spain’s central government said it would suspend Catalonia’s autonomy and impose direct rule after the region’s leader threatened to go ahead with a formal declaration of independence if Madrid refused to hold talks.

The pan-European Stoxx 600 index lost 0.66 percent and MSCI’s gauge of stocks across the globe shed 0.15 per cent.

Madrid’s IBEX was last down 0.7 per cent, after dropping as much as 1 per cent.

New York

Wall Street pulled back from record highs on Thursday with Apple leading a decline in technology stocks and a bunch of weak corporate results adding to the dour mood.

Apple fell as signs of poor demand for iPhone 8 raised doubts about the company’s double 2017 iPhone release strategy.

The financial index dropped, led by losses in Bank of New York Mellon and KeyCorp.

United Airlines sank, weighing on other airlines stocks and the Dow Jones Transport index, after the third largest US carrier’s profit fell due to flight cancellations during the hurricane season.

-(Additional reporting: Reuters)