Californian tech sell-off exports gloom to European markets

Iseq remains flat on reduced trading volumes

Travel stocks continue to be hit hard, with Irish Ferries owner Irish Continental Group down 5.5 per cent to €3.40.

Travel stocks continue to be hit hard, with Irish Ferries owner Irish Continental Group down 5.5 per cent to €3.40.

 

European stocks were hit by a sell-off in technology shares on Tuesday, as US peers slumped on fears of new coronavirus restrictions.

A strong opening by other US stocks, however, helped the export-heavy FTSE 100 complete a major turnaround to nudge into the green, even as statisticians revealed that UK GDP fell below expectations in May.

Dublin

The Iseq remained flat on reduced trading volumes. Travel software company Datalex was the big faller, down 75 per cent to 22.6 cents, after it resumed trading after 15 months following an accounting scandal.

Irish main banks both finished in the black on a read through from US institutions, with AIB up 3 per cent to €1.13 and Bank of Ireland up almost 1 per cent to €1.76.

Travel stocks continue to be hit hard, with Irish Ferries owner Irish Continental Group down 5.5 per cent to €3.40. Packaging group Smurfit Kappa fell 2.8 per cent to €26.86. It was among the Iseq’s big guns that failed to fire.

London

BT Group jumped to the top of the FTSE 100 after the UK Government gave it longer than expected to remove Huawei equipment from its 5G mobile network. The UK government said telecoms companies would need to rip out all of the Chinese tech giant’s equipment from their networks by 2027. BT moved 4.5p higher to 115.6p.

Elsewhere in company news, shares in online supermarket Ocado slipped after it posted first-half pre-tax losses of £40.6 million after it spent heavily on the roll-out of its overseas technology offering. The company also reported a 27 per cent jump in retail revenues to £1.02 billion due to “unprecedented” demand during the six months to May 31st. Shares closed down 44.5p at 1,988.5p.

Soft drink manufacturer Fever-Tree saw shares fall after it was hit heavily by the closure of bars and restaurants.

Europe

The pan-European STOXX 600 index fell 0.8 per cent after two days of gains, with technology stocks posting their biggest drop in over a month, down 2.6 per cent. The French Cac moved 1.15 per cent lower, while Germany’s DAX index ended 0.8 per cent lower.

European banks cut a chunk of their losses after largest US lender JPMorgan Chase & Co posted a smaller-than-expected 51 per cent drop in second-quarter profit.

Healthcare stocks were among the biggest drags, with Roche down 1.6 per cent. The Swiss drugmaker struck a $1.7 billion cancer drug pact with Blueprint Medicines, which includes rights to the US company’s cancer drug pralsetinib.

Shares in SAP SE, ASML Holding NV, Prosus NV and Infineon Technologies AG fell between 2.6 per cent and 5 per cent, tracking continued declines in US tech majors on worries that another lockdown in California to contain a surge of coronavirus infections may slow a U.S. economic recovery.

New York

The S&P 500 and Dow indexes edged higher in volatile trading on Tuesday as investors digested a mixed bag of quarterly earnings reports from US lenders but technology stocks fell on worries over new business restrictions in California. Largest US lender JP Morgan Chase & Co was up 0.2 per cent after it posted a smaller-than-expected 51 per cent drop in second-quarter profit.

However, Wells Fargo tumbled 5.7 per cent after booking a quarterly loss for the first time since the 2008 financial crisis.

Citigroup was also down 2.7 per cent as it reported a steep fall in quarterly profit. The S&P 500 banks index slipped 1.3 per cent as the banks set aside a combined $28 billion to cover potential losses on borrowers hurt by the pandemic.

But a recent record surge in Covid-19 cases and new business restrictions, particularly in California, have sparked a selloff in tech stocks, with the Nasdaq pulling back about 6 per cent from its intraday record high on Monday. – (Additional reporting: Reuters/PA)