Chinese trade concerns weigh on global markets

Prospect of increased regulatory costs for Irish banks a possible reason for share falls

 New York Stock Exchange: power companies  the only group to advance. Photograph: Michael Nagle/Bloomberg

New York Stock Exchange: power companies the only group to advance. Photograph: Michael Nagle/Bloomberg

 

European shares fell on Thursday as underwhelming Chinese trade data knocked down mining stocks.

US stocks also fell to three-month lows as the disappointing Chinese data sparked fresh concern that tepid global growth will weigh on the US economy, just as the US Federal Reserve prepares to raise borrowing costs.

DUBLIN

Bank of Ireland fell 2.3 per cent in afternoon trading. Analysts noted that Irish banks were likely to face increased regulatory costs, although these have probably already been built into forecasts.

Kenmare Resources, the Irish miner with operations in Mozambique, fell 0.9 per cent right at the end of the session, after treading water most of the day. The fall came despite the fact that Kenmare reported record production of finished product for the third quarter.

The food sector proved volatile. Glanbia fell 2.7 per cent, while Kerry Group rose 1.9 per cent. The sector was affected by an update this morning from Unilever, which reported slow volumes in the third quarter. It was, analysts said, “a mixed read-through for Kerry”.

Swiss-Irish baker Aryzta, whose new chairman is Gary McGann, fell 1.1 per cent.

LONDON

Housebuilders pushed ahead as investors cheered a closely watched report revealing home buyer demand was picking up.

The Royal Institution of Chartered Surveyors said a balance of 8 per cent more chartered surveyors reported an increase in buyer inquiries rather than a decrease in September.

Barratt Developments rose 9.2p to 483.2p, while Persimmon climbed 32p to 1,723p.

Away from the top tier, WH Smith was up nearly 4 per cent during the session before paring gains as the retailer hailed its best annual sales for 14 years. Shares in the FTSE 250 firm climbed 7p to 1,532p, as it was boosted by surging demand for food on the go across its stores based in airports and train stations. The chain said it sold more than 10 million meal deals over the year to August 31st, helping drive a 4 per cent rise in like-for-like sales in its travel arm.

Shares in Anglo American and Rio Tinto were off 49.9p to 990.6p and 131.5p to 2,576p respectively, as investors fear China’s insatiable appetite for commodities could tail off if economic growth eases.

EUROPE

The pan-European STOXX 600 index fell 0.9 per cent. The index, which is down by around 8 per cent so far in 2016, fell as much as 1.4 per cent earlier in the session to hit its lowest point since July 12th. The basic resources, insurance and bank indices were the three biggest sectoral losers, with a drop of more than 2 per cent.

Aegon fell 5.9 per cent after Société Générale cut it to a “hold” on worries about variable annuities in the US.

Dutch navigation firm TomTom fell 7.8 per cent after it said that sales of its personal navigation devices had been weaker than expected in the third quarter.

NEW YORK

Heading into afternoon trading, financial shares plunged the most in a month as a rally in treasuries sent bond yields lower, a day before several big banks report third-quarter results.

Miners tumbled to the lowest since early July after data showed that Chinese imports had fallen more than forecast. Power companies were the only group to advance as investors sought out safety.

Losses were broad-based, with 10 of the 11 Standard & Poor sectors trading lower. The financial index fell by its most in a month.

Berkshire Hathaway, Bank of America, Wells Fargo and JP Morgan were the biggest drags on the index, falling between 1.2 and 2 per cent. JP Morgan, Citigroup and Wells Fargo are due to report quarterly results on Friday.

Prices of gold, a safe haven, ticked higher, while the dollar, which is near a seven-month high, fell 0.33 per cent against a basket of major currencies.

Additional reporting: PA/Reuters/Bloomberg